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The issue for decision1 is whether petitioners are entitled
to deduct in 1985 a worthless debt as a business bad debt under
section 166(a)(1)2 or are limited to a deduction for a nonbusi-
ness bad debt under section 166(d)(1). We hold that the debt is
a nonbusiness bad debt, and, therefore, petitioners are limited
to a short-term capital loss.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. We
incorporate by this reference the stipulation of facts and
attached exhibits.
Petitioner resided in Hamilton, Montana, on the date the
petition was filed. Decedent passed away on September 12, 1990,
prior to the date on which the petition was filed. Petitioner
filed the petition on her own behalf and as personal representa-
tive for the estate of her husband, Joseph Osterbauer. Peti-
tioner and decedent filed a joint Federal tax return for the 1985
tax year.
1There is an issue raised by the pleadings of whether
petitioners realized a $619 gain on the repossession of certain
property during 1985. Petitioners have offered no evidence on
this issue and have not raised it on brief, so we conclude they
have abandoned it.
2All section references are to the Internal Revenue Code in
effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
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