John J. Kaiser and Sofia P. Kaiser - Page 8

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          officers or any salaries or wages paid.  Petitioner testified               
          that he was not an employee of MACS but that he was chairman of             
          its board of directors.  At trial, when petitioner was asked if             
          he received a salary from MACS, he testified that he received a             
          salary in the form of rent paid by MACS for use of a warehouse he           
          owned.5  Under the circumstances, we hold that petitioner was not           
          an employee of MACS.                                                        
               Even if petitioner were an employee of MACS, he has not                
          shown that the loans were "necessary to keep his job or [were]              
          otherwise proximately related to maintaining his trade or                   
          business as an employee."  Whipple v. Commissioner, supra at 204.           
          Moreover, we believe that petitioner's dominant motive for making           
          the loans was to protect his investment.  See United States v.              
          Generes, supra at 103 ("We conclude that in determining whether a           
          bad debt has a 'proximate' relation to the taxpayer's trade or              
          business, as the Regulations specify, and thus qualifies as a               
          business bad debt, the proper measure is that of dominant                   
          motivation, and that only significant motivation is not                     
          sufficient.").                                                              
               On the record before us, we hold that petitioners have                 
          failed to present sufficient evidence to establish that they are            

          5    Petitioner did not show what the rent was, or that he was in           
          the business of leasing the warehouse to MACS, much less that the           
          dominant reason for the loan was to protect any such business.              
          Cf. Commissioner v. Moffat, 373 F.2d 844 (3d Cir. 1967), affg.              
          T.C. Memo. 1965-183.                                                        




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