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allows an individual to deduct losses sustained from bad debts
that become worthless during the taxable year. Section 166(d)(1)
restricts the deduction for losses from nonbusiness debts of a
taxpayer other than a corporation by characterizing them as
short-term capital losses. Only a bona fide debt, arising from a
"debtor-creditor relationship based upon a valid and enforceable
obligation to pay a fixed or determinable sum of money" qualifies
for a deduction under section 166. Sec. 1.166-1(c), Income Tax
Regs. Whether a bona fide debtor-creditor relationship exists is
a question of fact to be determined upon a consideration of all
the facts and circumstances. See Fisher v. Commissioner, 54 T.C.
905, 909 (1970). Petitioners must show that a bona fide debt
existed between them and Mr. Bogue. See Rockwell v.
Commissioner, 512 F.2d 882, 885 (9th Cir. 1975), affg. T.C. Memo.
1972-133.
We also note that intrafamily transactions are subjected to
closer scrutiny. See Caligiuri v. Commissioner, 549 F.2d 1155,
1157 (8th Cir. 1977), affg. T.C. Memo. 1975-319; see also Perry
v. Commissioner, 92 T.C. 470, 481 (1989), affd. 912 F.2d 1466
(5th Cir. 1990). It is more likely that a transfer between
family members is a gift. See Perry v. Commissioner, supra;
Estate of Reynolds v. Commissioner, 55 T.C. 172, 201 (1970).
Petitioners may overcome this inference by showing that a real
expectation of repayment existed and that there was an intent to
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