- 2 - 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 andPage: Previous 1 2 3 4 5 6 7 Next
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