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Mr. Ridgway
On October 6, 1988, petitioner gave James B. Ridgway (Mr.
Ridgway) a check for $300 (Mr. Ridgway's check) that included the
following handwritten notation on the check stub for that check:
"Auto Purchase Loan". Mr. Ridgway did not repay the amount of
Mr. Ridgway's check.
Claimed Worthless Stock
On April 17, 1987, petitioner paid $1,000 in return for
1,000 shares of $1 par value common stock of Celebration Products
(Celebration), and he received a stock certificate representing
those shares. On May 14, 1988, petitioner paid $2,000 to pur-
chase an additional 2,000 shares of $1 par value Celebration
common stock. However, petitioner received a stock certificate
representing only 1,000 of those 2,000 shares.
At all relevant times, Mr. Parra was a principal officer of
Celebration. During 1989, petitioner determined that Mr. Parra
was unable to make Celebration into a successful business.
Return Treatment of Claimed Stock Sale Losses,
Nonbusiness Bad Debts, and Worthless Stock
In Schedule D (Capital Gains and Losses) of petitioner's
1989 return (1989 Schedule D), petitioner claimed the following
as short-term capital losses:
Promissory Note -- Robert L. Parra $7,500
Promissory Note -- Robert L. Parra 7,500
Promissory Note -- Robert L. McWilliams 6,000
Celebration Products Stock 2,500
Total 23,500
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