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with its interest payments (actually made to Paulan) on the
alleged indebtedness.
We find that petitioners have failed to provide credible
evidence that the Paulan direct payments entitled them to any
bases in Sidal under section 1366(d)(1)(B).
3. The Wire Transfer Payments
Unlike the Paulan direct payments, the wire transfer
payments, in form, suggest a back-to-back loan structure through
petitioners as the intermediate borrowers (from Paulan) and
lenders (to Sidal). Moreover, the adjusted trial balance for
1997 (and for all subsequent years) always reflected the payments
as giving rise to payables from Sidal to petitioners and from
petitioners to Paulan. Therefore, there was no necessity for a
1997 yearend adjusting entry. Nonetheless, consistent with the
Paulan direct payments, Sidal made all principal and interest
payments directly to Paulan.
As in the case of the Paulan direct payments, and largely
for the same reasons, we give no significant evidentiary weight
to the promissory notes and minutes relating to the wire transfer
payments. Petitioners cannot recall when the promissory notes,
dated December 18, 1997, were executed (except insofar as they
could agree upon an execution date sometime between 1997 and
2000), and petitioners have stipulated that the applicable
minutes authorizing those November 24, 1997, payments were
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