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Respondent contends that petitioners received $900,000 of
discharge of indebtedness income on December 29, 1994, when the
Rapp Group paid that amount as guarantors in partial satisfaction
of the Miller/Huntington Loan. Petitioner was at this point
released from his obligation to the extent of $900,000, respondent
argues, because the Rapp Group had waived any right to
reimbursement from petitioner under the guarantor waivers.
Petitioners contend that no discharge occurred on December 29,
1994, because petitioner remained liable to the Rapp Group for the
$900,000 they paid as guarantors.
We agree with respondent. The only evidence supporting the
contention that petitioner remained liable to the Rapp Group for
$900,000 is his self-serving testimony to that effect. We are not
required to accept such testimony. See Tokarski v. Commissioner,
87 T.C. 74, 77 (1986). Balanced against petitioner's testimony
are, first, the terms of the guarantor waivers, under which the
Rapp Group waived any right of indemnification or reimbursement
(or subrogation from Huntington) against petitioner that would
otherwise arise by virtue of any payment under their guaranties.
Second, in the more than 8 years between the Rapp Group's payment
under their guaranties and the trial in this case, the Rapp Group
did not seek reimbursement from petitioner, nor did petitioner
make any payment in satisfaction of his purported liability to
them.
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