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After concessions,1 the issues for decision are:
1. Whether petitioner's transfer of $350,000 to Swirl, Inc.
(Swirl), in October 1986 was a loan or a contribution to capital.
We hold that it was a loan.
2. Whether, based on our holding that petitioner lent
$350,000 to Swirl, petitioner may deduct as a bad debt $290,325,
as respondent contends; $308,000, as petitioner contends; or some
other amount. We hold that petitioner may deduct the amount that
Swirl owed petitioner less the amount that petitioner owed Swirl
on December 31, 1988.
3. Whether petitioner is liable for the addition to tax for
failure to file under section 6651(a). We hold that he is.
Section references are to the Internal Revenue Code in
effect for the year in issue. Rule references are to the Tax
Court Rules of Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
A. Petitioner
Petitioner lived in New York City when he filed the
petition. Petitioner received a bachelor of science degree in
economics from the Wharton School at the University of
Pennsylvania in 1968. Larry Nachman is petitioner's brother.
1 Respondent concedes that petitioner is not liable for the
addition to tax for negligence for 1988.
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