Held, distinguishing the facts of various judicial pronouncements cited by the Petitioner affirming the Tax Court's decision that the Petitioners' capital contributions do not constitute "items of income (including tax-exempt income)" under § 1366(a)(1)(A) and cannot be used to restore their bases in indebtedness pursuant to § 1367(b)(2)(B).
Further it was held that because the petitioners have not met their burden of showing that the primary purpose of their capital contributions was to obtain releases from their loan guarantees, the petitioners were not entitled to deductions from ordinary income pursuant to § 165(c)(2).
