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142(a); United States v. Generes, supra at 104; Whipple v.
Commissioner, supra at 202.
Petitioner reiterated several times at trial that the reason
she made the loans to Hamilton, despite her son's miserable
performance as a caterer, was to protect the Puro income stream
from being attached by Kaplan. Assuming that her dominant
motivation was as she stated, and not some other motivation, such
as not wanting to see her son fail in his new business, that does
not by itself mean that the debt is a business bad debt. Before
a debt can be a business bad debt, there must be a trade or
business of the lender to which the debt relates. See, e.g.,
Whipple v. Commissioner, supra at 201-202.
At trial, respondent asked petitioner why she continued
making loans to Hamilton even though the business was failing.
She acknowledged that it was to protect her investment in Cold
Springs. (Emphasis added). Respondent also elicited a statement
from petitioner that, subsequent to the sale of Cold Springs'
assets to Puro, Cold Springs was no longer "in the trade or
business" of operating a water company. Petitioner was not an
employee of Cold Springs or Hamilton, nor was she in the business
of making loans.
On her 1994 and 1995 Federal income tax returns, petitioner
attached a Schedule C reporting business activity from her travel
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