-183-
The Ballards reported Fairfield items of income and loss on
their 1987, 1988, and 1989 tax returns. Exhs. 391-393.
When Gallenberger was questioned about the accounting
entries for the Fairfield transaction, she could not recall the
details and suggested Ballard should be questioned on the
matter.96 Ballard believed that (1) he owed TMT approximately
$200,000 on the Fairfield transaction, (2) TMT continued to
receive “interest” on the deal, (3) he owned two-sevenths of
Fairfield, (4) the initial Fairfield investment was $1,350,000
and the investment had increased in value to approximately
$2,350,000, and (5) the Fairfield transaction was a good deal for
TMT and a bad deal for Ballard. Ballard, Transcr. at 249-250,
286-288. There is no evidence in the record that TMT ever
received any payments (interest, dividends, or otherwise)
attributable to Ballard’s promissory note described above.
The record is unclear as to whether TMT ever owned shares in
Fairfield that it could transfer to Ballard. Ballard asserted in
Petitioners’ Reply Brief at 625-626 that because Fairfield was an
96 Petitioners argued in their Reply Brief at 626 that
respondent failed to establish any relevant facts regarding the
accounting surrounding the Fairfield transaction because
respondent failed to question Gallenberger about the matter. To
the contrary, respondent’s counsel questioned Gallenberger about
the details of the transaction, and her reply ultimately was “ask
Claude”. Gallenberger, Transcr. at 2477-2481.
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