Paul G. Gubbini - Page 15

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          promoter.  It appears to us that, in making the advances,                   
          petitioner’s motivation was to protect his reputation as an                 
          investor.  Petitioner also contends that he made advances to                
          Color Trick in an effort to protect the investments of the other            
          physicians who had loaned money to Color Trick.  Advancing money            
          to a corporation to protect the investments of others, however,             
          is an indication that the taxpayer is not a promoter.  United               
          States v. Clark, supra at 896.                                              
               Petitioner also contends that his advances and loans to                
          Color Trick exceeded his initial investment in its stock by 60              
          times and that this circumstance indicates the lack of an                   
          investment motive for the loans and advances.  We do not consider           
          the circumstance pointed to by petitioner indicative of the lack            
          of an investment motive given that petitioner (1) acquired                  
          additional stock in Color Trick during 1988 and 1989, (2) held 60           
          percent of its stock by the end of 1989 and (3) was not entitled            
          to compensation for his services to Color Trick.  It seems quite            
          plausible to us that petitioner’s loans and advances were made to           
          protect his increasing and substantial equity stake in the                  
          corporation.                                                                
               Based on our consideration of the entire record in the                 
          instant case, we hold that petitioner’s loans and advances to               
          Color Trick, which became worthless in 1989, are nonbusiness bad            
          debts.  Whipple v. Commissioner, 373 U.S. at 203-204; United                






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