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to the Miller loan.13
Based on our examination of the entire record in this case,
we find that petitioner has failed to establish that he is
entitled to any deduction under section 166 with respect to the
Miller loan.
We address now whether petitioner is entitled to a deduction
under any other provision of the Code with respect to the Miller
13Assuming arguendo that we had found that petitioner estab-
lished that the Miller loan was a business debt for purposes of
sec. 166 and that the $2,641 of unrecovered principal of that
loan became worthless during 1993, we nonetheless find on the
instant record that petitioner has failed to show that the amount
of the deduction under sec. 166(a) with respect to that loan, as
determined under sec. 166(b), includes $109,482 of legal expendi-
tures that he claims he incurred in pursuing the Miller loan
litigation. As we understand it, petitioner bases his contention
that such alleged expenditures are to be included as part of the
adjusted basis of the Miller loan as determined under sec. 166(b)
because the note evidencing that loan contained the following
provision: “Should suit be commenced to collect this note or any
portion thereof, such sum as the Court may deem reasonable shall
be added hereto as attorney’s fees.” We note first that peti-
tioner has failed to establish on the record in this case that he
paid $109,482 of legal expenses as of the end of 1993. The
record establishes that as of the end of that year petitioner had
incurred only $90,999 of legal expenses, of which only $46,593
had been paid. Moreover, on the record in this case, we find no
evidence that any court directed in the year at issue or in any
year prior to or after that year that any amount, let alone a
reasonable amount, be added to the principal of the Miller loan
as attorney’s fees. Assuming arguendo that we had found that
petitioner established that the Miller loan was a business debt
for purposes of sec. 166 and that the $2,641 of unrecovered
principal of that loan became worthless during 1993, on the
record before us, we find that petitioner has failed to persuade
us that $109,482 of legal expenditures are includible under sec.
166(b) in determining the amount of deduction allowable for a
business bad debt under sec. 166(a).
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