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for 1992, 1994, and 1995, respectively.1 The parties filed a
joint motion to sever the issue relating to Bille J. Scallen’s
joint and several liability, which we granted. After
concessions,2 the only issue for decision is whether certain
debts formerly owing to petitioner were business bad debts for
purposes of section 166(a).3
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time of filing the
petition, petitioners resided in Minneapolis, Minnesota.
1Petitioner Bille J. Scallen is a party to this case by
reason of the fact she filed joint Federal income tax returns
with Thomas K. Scallen for tax years 1992, 1994, and 1995.
References to petitioner are to Thomas K. Scallen.
2Petitioners concede that a certain Magazine Publishing
Company, Inc., debt is an S-corporation item and not a trade or
business bad debt; petitioners concede that a certain Stephen
Scallen debt is a nonbusiness bad debt; petitioners concede
certain Schedule E income adjustments of $8,638 and $42,151 for
1994 and 1995, respectively; and the parties agree that if the
Court sustains respondent’s determinations, then the correct
amount of petitioner’s allowable itemized deduction for interest
expense is $226,203 instead of $245,043 as determined in the
notice of deficiency. Respondent concedes the issue relating to
his determination of unreported investment interest income of
$25,000, $262,000, and $2,000 in 1990, 1991, and 1992,
respectively.
3Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the tax years at issue.
All Rule references are to the Tax Court Rules of Practice and
Procedure.
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