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separate and distinct from any other $400,000 amount; i.e., the
cap loan and the contributions, separately. Respondent also
concedes that petitioner was in the business of being an auto
dealership employee. However, respondent does not agree that
petitioner's dominant motive at the time of the guarantee was
related to any trade or business. Respondent argues that the
guarantee was made to protect petitioner's investment in the auto
dealership.
A related issue concerns the appropriate timeframe within
which to measure petitioner's motivation in guaranteeing the
floor plan loan. Respondent asserts that petitioner's dominant
motivation should be measured from the time when he last
negotiated for an extension and personally guaranteed an
extension for the floor plan loan in October 1989. Petitioner
contends that the correct time was when the business opened in
March 1987.
Generally, a taxpayer's motivation is determined as of the
date upon which the taxpayer made the guarantee rather than the
date upon which a payment in discharge of liability as guarantor
is made. Harsha v. United States, supra; French v. United
States, supra; Smartt v. Commissioner, T.C. Memo. 1993-65.
Specifically, the focus of inquiry on a taxpayer's dominant
motivation is at the time the taxpayer incurs the obligation, not
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