- 15 - Respondent argues that there was no “debt” that would qualify for the bad debt deduction. In particular, respondent contends that petitioner did not show that he was entitled to reimbursement for the various expenses at issue. Respondent asserts that a precondition for obtaining out-of- pocket expenses from Kirshner Global was not fulfilled in that petitioner failed to show that he obtained interim financing within the time period specified in the 1995 venture agreement. At trial, petitioner claimed that his entitlement to reimbursement for expenses was not contingent on obtaining interim financing. The totality of the record satisfies the Court that respondent is correct. There is no documentation or other evidence that establishes the existence of a bona fide debt owing to petitioner by either Kirshner Global or Kirshner Content (petitioner’s Schedule C activity) that qualified for a bad debt deduction. Also, there is no evidence to support a finding that petitioner was contractually entitled to be reimbursed for the various Kirshner expenses that are characterized as a bad debt on Schedule C of petitioner’s tax return. With respect to Kirshner Global, the language of the venture agreement supports respondent’s position. In a subsection entitled “Interim Financing”, Kirshner Global was required, through the Equisource Group, to obtain interim financing thatPage: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011