-340-
interests in LICCDC/Cablevision. Exhs. 9186, HB, BW and YP
Schedules K-1; 7307. As discussed above, the Bea Ritch Trusts
acquired their HB, BW, and YP partnership interests indirectly
through their partnership interests in OBA. Exh. 9186, HB, BW
and YP Schedules K-1.
Over the years, the Bea Ritch Trusts made substantial loans
to Kanter. TACI’s general ledger reflects that Kanter borrowed
$150,000 from the Bea Ritch Trusts during 1986 and repaid $10,000
to the trusts during that year. Exh. 9110 (ledger tab). As of
January l, 1987, Kanter owed a total of $287,030 to the Bea Ritch
Trusts.135 As of January 1, 1989, Kanter owed the trusts
$1,311,430 as a result of additional loans from the trusts.
Kanter also borrowed substantial sums from IRA and THC during the
period 1987 to 1989. Exhs. 9110 (TACI ledger for 1986), 9111
(Kanter ledger for 1987, Bates No. 000106), 9114.
Respondent determined in the notice of deficiency issued to
the Kanters for 1987 that the Bea Ritch Trusts were Kanter’s
grantor trusts under section 671. Respondent further determined
that, as such, all or portions of the following items constituted
taxable income, losses, or deductions of Kanter: (1) $1,094,896
135 The foregoing suggests that, as of Jan. 1, 1986, Kanter
owed approximately $147,000 to the Bea Ritch Trusts. Exhs. 9110
(TACI ledger for 1986), 9111 (Kanter ledger for 1987, Bates No.
000106).
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