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economic outlay with respect to any part of the $800,000 “loan”
to Marc.11
IV. Silver Glen Loan
Petitioner argues that he has additional basis in Marc by
virtue of a $49,000 loan that he claims he previously made to
Silver Glen. On opening brief, petitioner contends that in 1997
Silver Glen repaid this loan to him, and that he then contributed
the $49,000 to Marc, entitling him to basis of that amount in
Marc.12 Respondent disputes whether petitioner ever made a
$49,000 loan to Silver Glen, whether Silver Glen ever repaid such
11 Petitioner has not raised, and we do not reach, any issue
regarding the proper tax treatment of the $1,000 prepaid finance
charge that petitioner paid the Bank upon making his promissory
note.
On brief, respondent argues that petitioner was not at risk
with respect to his purported $800,000 loan to Marc, and
therefore petitioner’s loss deductions from Marc are disallowed
pursuant to sec. 465(a). In light of our conclusion that the
$800,000 purported loan gave petitioner no basis in Marc, it is
unnecessary to reach the issue whether petitioner was at risk
with respect to the purported loan. We note, however, that “The
at risk analysis is very similar to the actual economic outlay
analysis”. Oren v. Commissioner, 357 F.3d 854, 859 (8th Cir.
2004), affg. T.C. Memo. 2002-172.
12 On reply brief petitioner alters his story to say that in
1997 Silver Glen “distributed this [$49,000] loan to Petitioner”
and “Petitioner contributed the * * * [Silver Glen] note to * * *
[Marc].” There is no such note in evidence. But under this
version of the facts, it is not apparent that the contribution to
Marc of such a Silver Glen note would create any basis in Marc;
by his own admission, petitioner had zero basis in the Silver
Glen note. In any event, petitioner’s inconstancy with respect
to the facts undermines his credibility.
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