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McKay v. Commissioner, 89 T.C. 1063, 1069 (1987), affd. 886 F.2d
1237 (9th Cir. 1989); Wichita Terminal Elevator Co. v.
Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th
Cir. 1947).
Petitioner argues that he reasonably expected repayment of
the full $3,545,020 he transferred to Blackland between 1993 and
1995, plus interest, that the funds were transferred by him to
Blackland based on a valid debtor-creditor relationship and on an
enforceable debt obligation of Blackland, that the loans to
Blackland became worthless in 1995, and, therefore, that he
should be entitled to the $3,207,578 claimed bad debt deduction
for 1995.
Respondent argues that petitioner has neither proved that
the funds petitioner transferred to Blackland between 1993 and
1995 represented valid loans nor that the purported loans became
worthless by December 31, 1995.
At the outset, we emphasize that the funds Blackland
transferred to the tenant farmers are not in dispute. Respondent
has not challenged the loan characterization thereof. At issue
are only the funds petitioner transferred to Blackland. With
regard thereto, we agree with both of respondent’s arguments.
The credible evidence before us is inadequate to establish that
the funds petitioner transferred to Blackland constituted valid
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