William King Alt and Barbara G. Alt - Page 3

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               Respondent determined a deficiency of $970 in petitioners’             
          Federal income tax for 2000.                                                
               The sole issue for decision is whether, under section                  
          166(d), petitioners are entitled to a nonbusiness bad debt                  
          deduction for loans or advances to their son.                               
               Some of the facts were stipulated.  Those facts and the                
          accompanying exhibits are so found and are incorporated herein by           
          reference.  Petitioners’ legal residence at the time the petition           
          was filed was Lexington, Kentucky.                                          
               Petitioners’ son, Michael Alt (Michael), while a student at            
          the University of Kentucky at Lexington, Kentucky, was employed             
          part time at a pet store.  He continued to work in the business             
          and, at some point, became manager of the store.  The business              
          was locally owned.  Sometime in 1995, the owner decided to sell             
          the business.  Since Michael had worked in the business for                 
          several years and was intimately acquainted with its customers              
          and its merchandise, he became interested in purchasing the                 
          business.  With substantial financial assistance from                       
          petitioners, Michael purchased the business.  The financial                 
          assistance provided by petitioners was $97,000.  Of that amount,            
          $55,000 was for purchase of the business, and $42,000 was for               
          working capital.  Petitioners were both retired and, in order to            
          obtain the $55,000, borrowed $55,000 from a local bank and                  

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