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Taxpayers bear the burden of showing entitlement to
deductions and must show that a bona fide debt existed and that
the debt became worthless in the year claimed.5 See sec. 166;
Rule 142(a); Dixie Dairies Corp. v. Commissioner, 74 T.C. 476,
493 (1980). The existence of a bona fide debt can be shown by
proof of a “debtor-creditor relationship based upon a valid and
enforceable obligation to pay a fixed or determinable sum of
money.” Sec. 1.166-1(c), Income Tax Regs.; see Dixie Dairies
Corp. v. Commissioner, supra. Whether a bona fide debtor-
creditor relationship exists is a question of fact to be
determined upon a consideration of the relevant facts and
circumstances. See Fisher v. Commissioner, 54 T.C. 905, 909
(1970).
It is established that being an employee may be a trade or
business for purposes of section 166. Trent v. Commissioner, 291
F.2d 669 (2d Cir. 1961), revg. 34 T.C. 910 (1960). It may be
necessary for an employee to lend money to an employer to
maintain the employee’s employment. In this case, maintaining
his employment was petitioner’s dominant motivation.
Accordingly, petitioner made the loans in his trade or business
of being an employee for purposes of section 166. Cf. id.
5 No question has been raised with respect to the burden of
proof or production under sec. 7491(a).
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