- 14 - in order to deduct the loans to the corporation as a business bad debt, petitioner had to show that the dominant motive in making the loans was to protect his employment, as opposed to an investment in the corporation. Petitioner made a significant contribution to the corporation. As a result of his efforts, it appears the corporation was on its way to becoming a successful venture. The total commissions and fees earned by the corporation from 1977 to 1979 were $8,865, $32,340, and $79,712, respectively. While petitioner received, in 1977 and 1978, approximately 50 percent of these net proceeds, in lieu of a stated salary, in 1979, petitioner received only $20,000 as "salary" because petitioner and Mr. Takos decided to limit the amount they received from the corporation to $20,000 each until the corporation was successfully established. The Court does not believe that petitioner would have been able to survive financially on this limited "salary" if petitioner had not maintained his full-time job at the University during the years 1977 to 1979. Considering the limited "salary" petitioner received from the corporation, the fact that petitioner received a full-time salary from the University while the corporation was in business, and the fact that petitioner made a significant initial capital contribution of $20,000 to the corporation, the Court concludes that, at the time petitioner made the loans to the corporation, the dominantPage: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
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