- 9 - 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 anyPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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