-4-
For the period 1987 through 1994, the company paid
petitioner the following salary:
1987 $76,327
1988 77,675
1989 75,000
1990 64,904
1991 82,500
1992 - 0 -
1993 31,731
1994 - 0 -
Over the period 1991 through 1993, petitioner made a number
of cash advances to the company in the form of 90-day promissory
notes bearing 10 percent interest. These advances, totaling
$1,994,518, were never repaid. On December 16, 1993, the company
issued a note in favor of petitioner (the December 1993 note) in
the amount of $2,656,617.
Petitioner filed suit against the company in August 1994 to
enforce the December 1993 note. In January 1995, petitioner
filed a motion for summary judgment in this litigation. When the
company sought to compel arbitration, petitioner successfully
resisted. As recently as October 1995, petitioner was pursuing
this litigation.
Discussion
In 1993, petitioner claimed a nonbusiness bad debt deduction
of $498,500. In 1994, he deducted business bad debts of
$2,041,409. Respondent argues that petitioner has failed to
establish the existence, nature, or worthlessness of the alleged
bad debts. We agree that petitioner has failed to prove his
entitlement to any bad debt deductions.
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011