- 12 -
Commissioner, supra at 868; Carlins v. Commissioner, T.C. Memo.
1988-79. Consequently, no collection activity was necessary.
With respect to recourse indebtedness, CareMatrix could take
action to collect the liability in a subsequent year. Upon a
default by petitioner, the stock pledge agreement provided that
CareMatrix could sell the collateral and apply the proceeds
toward the payment of the loan, and the loan documents did not
preclude the commencement of an action by CareMatrix to recover
directly from petitioner. However, neither the loan documents
nor Massachusetts law required that such a collection action be
commenced during the year of default. On the contrary, the
promissory note expressly provided that a delay by CareMatrix did
not constitute a waiver of its rights:
[CareMatrix] shall not, by any act, delay, omission or
otherwise be deemed to waive any of its rights or
remedies hereunder unless such waiver be in writing and
signed by * * * [CareMatrix], and then only to the
extent expressly set forth therein.
Respondent made no contention and offered no evidence that
CareMatrix affirmatively waived its right to payment from
petitioner. Additionally, the period of limitations for
CareMatrix to commence an action to enforce petitioner’s
repayment did not expire until April 15, 2006.9 See Mass. Gen.
Laws ch. 106, sec. 3-118 (1998 & Supp. 2005). Consequently, if
9State statutes of limitation are of evidentiary value as to
the timing of the realization of income. Policy Holders Agency,
Inc. v. Commissioner, 41 T.C. 44, 49 (1963).
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011