18
Petitioners' argument misses the mark. We consider whether a
taxpayer's dominant motive in becoming a guarantor is proximately
related to his or her trade or business at the time of the
guaranty rather than when a payment in discharge is made. United
States v. Generes, supra at 104; Harsha v. United States, supra.
Thus, we do not consider petitioner's motive when he made the
settlement payment.
Petitioners cite Syracuse v. Commissioner, T.C. Memo. 1981-
340. In Syracuse, we held that a debt is a business debt if the
dominant motive for creating or acquiring it is to benefit the
lender's trade or business. Petitioners' reliance on Syracuse is
misplaced. The taxpayer in Syracuse lent money to another
business to benefit his own business. We found that the taxpayer
in Syracuse was in the landfill business and not merely
investigating and preparing to enter the business when he lent
the money. Unlike the taxpayer in Syracuse who lent money to
benefit his trade or business, petitioner did not guarantee
Northeast's line of credit to enhance his trade or business.
c. Conclusion
Petitioner's dominant motive for guaranteeing the bank line
of credit to Northeast was to enhance his investment in
Northeast, not his trade or business. Thus, petitioners may not
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