- 38 -
balance of the estimated $225,000 fair market value of lot 12
(i.e., $45,000) was to be reflected as a loan from petitioners to
Edward O’Malley on which Edward O’Malley was not required to make
any payments; (6) petitioners were to pay all the expenses relat-
ing to lot 12, including all real property taxes; and (7) Edward
O’Malley was to retransfer lot 12 to petitioners after a five-
year period.
On June 14, 2000, pursuant to the agreement between Edward
O’Malley and Mr. O’Malley, (1) petitioners entered into a trans-
action with Edward O’Malley with respect to lot 12 that was
structured in the form of a sale of lot 12 by petitioners to
Edward O’Malley; (2) Edward O’Malley borrowed $180,000 from F&M
Bank and secured that loan with lot 12; and (3) Edward O’Malley
transferred to petitioners all but $8,475 of the $180,000 F&M
Bank 2000 loan, or $171,535.34
Pursuant to the agreement between Edward O’Malley and Mr.
O’Malley, as modified by them when Edward O’Malley agreed to
refinance the $180,000 F&M Bank 2000 loan, petitioners made from
July 2000 through December 2005 payments totaling $69,538.49 to
F&M Bank on the $180,000 F&M Bank 2000 loan or the refinanced F&M
Bank 2000 loan. Pursuant to the agreement between Edward O’Mal-
ley and Mr. O’Malley, as modified by them when Edward O’Malley
agreed to refinance the $180,000 F&M Bank 2000 loan: (1) From
34See supra note 15.
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Last modified: November 10, 2007