-271- c. Sale of Grantor Trust Notes for $1 In December 1987, IRA held a receivable of $507,648 due from IFI. IRA transferred the receivable back to IFI in exchange for all of IFI’s assets, which included receivables due from Ballard’s and Lisle’s grantor trusts as well as receivables due from Ballard ($196,648) and Lisle ($28,284), respectively. IRA then sold certain of the receivables due from Ballard’s and Lisle’s grantor trusts (with a face value of approximately $384,000) for $1 each to MAF, Inc. Morrison, MAF’s president, admitted that MAF engaged in the transactions merely as an accommodation to Kanter. In addition, after writing down the value of the receivables due from Ballard and Lisle to $84,889 and $12,185, respectively, IRA treated these receivables as bad debts for which it claimed deductions on its 1987 tax return. After the IRS began its examination, Kanter contacted Ballard and Lisle to discuss repayment of their debts. These discussions were merely postexamination window dressing. d. IRA Loans to Kanter At the end of 1989, IRA’s records reflected loans to Kanter totaling $600,000. There is no evidence that any principal or interest was paid on these loans.Page: Previous 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 Next
Last modified: May 25, 2011