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percent of the payment. Petitioner has not proven that such
right is worthless. Sec. 1.166-9(e)(2), Income Tax Regs.
Accordingly, we will consider only one-half of the $53,189
payment to be worthless and entitled to a bad debt deduction.
However, we must now consider whether the debt is business or
nonbusiness.
Respondent argues that petitioner is not entitled to a
business bad debt because petitioner did not incur the debt in
the course of his trade or business.
We have held that payments made by partners on behalf of
their partnerships were business bad debts where the partners'
payments were in furtherance of the partnership business. Butler
v. Commissioner, 36 T.C. 1097, 1106 (1961); Davis v. Commis-
sioner, 11 T.C. 538 (1948); Stanchfield v. Commissioner, T.C.
Memo. 1965-305.
The payment at issue relates to the loan agreement entered
into between petitioner, Klutts, and Weimar Bank in 1985. At
that time, petitioner was no longer in the oil and gas business.
There is evidence in the record that petitioner subsequently went
into the real estate sales business. Notwithstanding the
terminology used to describe the 1983 agreement as a "renewal" of
the original loan entered into in 1980, when arguably petitioner
was in the oil and gas business, the plain fact is that the 1985
agreement was a separate and distinct agreement. The 1985 loan
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