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financial difficulties and because petitioner thought suing the
Kadrliks might hurt his own reputation in the community.
On petitioner’s 1991 Schedule C, petitioner claimed a
deduction for a bad debt of $300. In the notice of deficiency,
respondent determined that petitioners were not entitled to
deduct the bad debt claimed on the 1991 Schedule C because
petitioners had not established that a bad debt had arisen from a
true debtor-creditor relationship based upon a valid and legally
enforceable obligation, or, if it were a valid debt, that the
debt had become worthless during the year and all reasonable
steps had been taken to collect it.
Repairs Expense
During 1993, petitioner purchased an oriental rug that he
intended to use in his office on a rotating basis with another
rug he owned. He sent the oriental rug to Portland, Oregon, for
appraisal and repairs, totaling $2,956. Petitioner estimated
that the appraisal did not cost more than $100. Petitioner chose
both of the rugs he intended to use in his office because he
expected them to appreciate in value.
On petitioner’s 1993 Schedule C, petitioner claimed a repair
expense of $2,956. In the notice of deficiency, respondent
determined that petitioners were not entitled to deduct the
repair expense because petitioner had not established that the
repair expense was for an ordinary and necessary business expense
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