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shareholders, officers, and employees constitute either capital
contributions or loans to the corporation and are deductible, if
at all, only by the corporation. Deputy v. du Pont, supra at
393; Rink v. Commissioner, 51 T.C. 746, 751 (1969).
The $32,408.98 petitioner sent to Mr. Jasbon was apparently
for the purpose of establishing an office in Venezuela for ITG
and for the payment of business expenses of ITG. For the reasons
discussed above, petitioner, as an officer of ITG, cannot deduct,
on his individual return, expenditures made to promote the
corporation’s business. Respondent is sustained on this issue.
II. Loss or Bad Debt
The record is not entirely clear as to the nature of the
arrangement among petitioner, ITG, and Mr. Jasbon. We are
uncertain whether the funds transferred to Mr. Jasbon in January
1993 were an investment or a loan, and if a loan, whether the
loan was to ITG or Mr. Jasbon. There are no documents in the
record indicating the nature of the advance. We therefore
consider the loss provisions under section 165 and the bad debt
provisions under section 166 to see whether they provide any
relief for petitioners.
Section 165(a) provides for the deduction of losses
sustained during the taxable year for which no compensation is
received. In the case of individuals, section 165(c) limits the
deduction to losses incurred in a trade or business or in any
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