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balance sheets of HJ Builders. There is no corporate record of
any interest payments or repayment schedules in connection with
the second note. Thus the first and second notes are unreliable
and unpersuasive evidence in support of petitioners’ position
that the $72,000 in disbursements to Mr. Wright in calendar year
2001 was in repayment of prior loans by Mr. Wright to
HJ Builders.
Other conflicting evidence in the record prevents us from
concluding either that the disbursements to Mr. Wright were in
repayment of prior loans or that any such loans ever existed.
Although HJ Builders had an accounting code for loans payable to
Mr. Wright, no code was used to classify the payments totaling
$72,000 to Mr. Wright in 2001, and HJ Builders recorded no
shareholder loans on its Federal tax return. Petitioners have
also claimed that the loan documents were stolen in a burglary of
HJ Builders’ offices on February 11, 2002. However, no loan or
other corporate documents are included in the list of stolen
items provided to the police. Mr. Wright’s uncorroborated
testimony that the loan documents were stolen in the burglary is
unpersuasive. See Simpson v. Commissioner, T.C. Memo. 1999-274,
affd. 23 Fed. Appx. 425 (6th Cir. 2001).
Petitioners have presented no reliable promissory notes,
security agreements, payment schedules, amortization schedules,
notations of regular payments, interest calculations, or any
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