Reza and Connie M. Rezazadeh - Page 8

                                        - 8 -                                         

          corporation other than the judgment and that, in his opinion, the           
          judgment was virtually worthless.  Upon the receiver's                      
          recommendation, the receiver was discharged and the judgment of             
          the corporation was transferred to petitioner in consideration of           
          petitioner's payment of all attorney's fees related to the suit,            
          the receivership, and the collection efforts made in Florida.               
          From 1981 to 1987, petitioner paid a total of $11,682.75 in                 
          attorney's fees to the law firm that handled the suit and also              
          served as the receiver.                                                     
               Once the judgment was transferred to petitioner, he retained           
          the same counsel in Florida to continue efforts to collect the              
          judgment.  In 1989, the Florida attorney informed petitioner that           
          the judgment was not collectible because the judgment debtors had           
          no assets.  There is no evidence in the record to show that there           
          was ever any likelihood of collection of the judgment between               
          1985 and 1989.  At this point, petitioner was out $122,682.75,              
          consisting of the $111,000 "investment certificates" and the                
          $11,682.75 he spent in attorney's fees to have the judgment                 
          transferred to him and to attempt collection against the debtors.           
          Petitioner concluded, in 1989, that the $122,682.75 constituted a           
          worthless business debt.  Therefore, beginning in 1989 and                  
          through the years at issue, petitioners claimed on their Federal            
          income tax returns, as business bad debts, an amount that would             
          reduce their Federal income tax for the respective years to                 





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011