Gerry M. Griggs - Page 13

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          investment and merchant banking.  The facts support petitioner on           
          that argument.                                                              
               Petitioner and Thurmond credibly testified that they were in           
          the trade or business of investment and merchant banking.  The              
          totality of the circumstances shows that they sought to obtain              
          financing in return for obtaining a percentage interest in                  
          various Kirshner entities.  Multiple Kirshner documents show that           
          petitioner was described as the managing director of Equisource             
          Group and responsible for obtaining financing as well as pursuing           
          possible acquisitions.                                                      
               Petitioner was also slated to be on the board of directors             
          of Kirshner Global once financing was completed.  He was listed             
          as executive vice president, chief financial officer, treasurer,            
          and director of Kirshner Content in the February 22, 1996,                  
          confidential private placement memorandum.  The Court concludes             
          that these activities were not merely investment activities or              
          the management of petitioner’s investment but were part and                 
          parcel of petitioner’s trade or business.  Thus, the Court finds            
          that petitioner was engaged in a trade or business with respect             
          to these expenses.                                                          
               With respect to the claimed bad debts, petitioner must                 
          establish that the debts had some value at the beginning of 2000            
          and became worthless by the end of the year.  Milenbach v.                  
          Commissioner, 106 T.C. 184, 204 (1996), affd. in part, revd. in             






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