Gilbert Hahn, Jr. and Margot H. Hahn - Page 2

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          Judgment.1  The issue for decision concerns discharge of                    
          indebtedness income pursuant to section 61(a)(12).  For the                 
          reasons stated below, we shall deny petitioner’s motion.  Unless            
          otherwise indicated, all Rule references are to the Tax Court               
          Rules of Practice and Procedure, and all section references are             
          to the Internal Revenue Code, as amended.                                   
               Petitioners resided in Washington, D.C., when the petition             
          was filed.  References to petitioner in the singular are to                 
          Gilbert Hahn, Jr.                                                           
               During 1986, petitioner obtained a $1 million line of credit           
          from the National Bank of Washington (the bank), which was later            
          increased to $2 million.  During June 1988, petitioner borrowed             
          against the line of credit and gave the bank a promissory note in           
          the amount of $2 million (the note).  The note provides, inter              
          alia:  (1) The outstanding principal and interest shall be                  
          payable on demand; (2) until demand is made, petitioner shall pay           
          interest quarterly on the unpaid principal balance at the bank’s            
          floating prime rate plus  percent; (3) in the event of a late              
          payment, petitioner shall pay a late charge of 2 percent per                

               1 Petitioner and his wife, Margot Hahn, filed a joint 1995             
          Federal income tax return and a joint petition with the Court.              
          Petitioner Margot Hahn now seeks relief from joint and several              
          liability pursuant to sec. 6015, and each petitioner has retained           
          separate counsel.  Petitioner Margot Hahn did not join petitioner           
          Gilbert Hahn, Jr. in making the instant motion.                             

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