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motive in making the loans was to protect petitioner's
investment. United States v. Generes, 405 U.S. 93 (1972). While
the Court is satisfied that petitioner's ultimate goal was for
the corporation to earn sufficient income whereby he could retire
from the University and have a higher standard of living, at the
time the loans were made, petitioner was in the process of
nurturing the corporation. Had petitioner not made the loans to
the corporation, the corporation would not have survived, and
petitioner's substantial investment of $20,000 would have been at
risk. Although petitioner had a significant motive for
protecting his employment, the dominant motive was to protect and
enhance his investment in the corporation.
Petitioner argued on brief that the $203,948.42 judgment
rendered by the Iowa court in favor of the corporation
represented a trade or business asset of the corporation, and,
since the judgment was transferred to petitioner, the trade or
business characteristics of that judgment also transferred to
petitioner. Thus, petitioner argues, the "debt" was a business
bad debt. The Court rejects that argument. The tax
characteristics of the judgment are not before the Court. The
tax characteristics of petitioner's advances to the corporation
are at issue. In the transfer, petitioner received an asset, a
judgment, which unfortunately turned out to have no value. The
debt owing to petitioner from the corporation always remained as
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