- 15 - 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 asPage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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