- 48 -
addition to the decedent's estate is warranted on account of this
transaction. We hold for the estate on this issue.
b. The Decedent's 1990 Bad Debt Deduction
Respondent increased the decedent's adjusted taxable gifts
by $327,447 to reflect respondent's disallowance of various bad
debt deductions claimed by the decedent on his 1990 Federal
income tax return. The decedent claimed a $327,447 short-term
capital loss, described as "loans to third parties", with respect
to the following transactions: (1) On February 17, 1990, he gave
Ms. Wong $30,000; the underlying "note" conditions repayment of
the "loan" on Ms. Wong's sale of her residence; (2) on May 21,
1990, he gave Ms. Wong $38,000; the record contains neither a
note nor any other reliable evidence of a loan; (3) on May 26,
1990, he gave $209,447 to Ms. Wong's mortgagee; the record
contains neither a note nor any other reliable evidence of a
loan; (4) on October 17, 1990, he gave Phil Skauronski (Mr.
Skauronski) $25,000, and Mr. Skauronski gave the decedent a
"note" stating that he would repay the $25,000 with 15.5 percent
interest in 12 equal monthly payments; and (5) on October 22,
1990, the decedent gave Mr. Pasko $25,000; Mr. Pasko and the
decedent both signed a "note" that did not provide for interest,
security, collateral, or a fixed schedule of repayment. Mr.
Pasko has never made any payments on this "loan".
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