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trades or businesses. Petitioners contend that the makers of the
partnership loans looked to petitioner to satisfy the delinquent
tax assessments on the partnerships’ Vacaville properties and
that if petitioner had not made the tax payments, he would have
been “subject to risk if a judgment was brought against him which
could be executed against his other property holdings.”5 Apart
from petitioner’s uncorroborated testimony, however, the record
is devoid of evidence to support this contention. Petitioners
have failed to introduce credible evidence to establish that
petitioner’s failure to make the tax payments would have caused
direct and proximate adverse consequences to any businesses
conducted in petitioners’ individual capacities. See Hood v.
Commissioner, 115 T.C. at 180-181; Cloud v. Commissioner, T.C.
Memo. 1976-27. Indeed, there is no evidence to show that the
partnerships themselves, which presumably were primarily liable
for paying the property taxes and for repaying the loans, lacked
resources to satisfy such liabilities.
Petitioner testified that he made the tax payments “in
order to preserve my integrity and my standing with the bank, and
5 It is unclear from the record why a judgment could be
executed against petitioner if the taxes went unpaid. If we are
to assume that it would be on account of his guaranty of the
mortgage notes, it is unclear that petitioner entered into the
guaranty for a business purpose so as to entitle him to a
business expense deduction pursuant to sec. 162. Moreover,
petitioner has not shown that his subrogation rights against his
corporation or partnerships were worthless within the meaning of
sec. 166.
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