Gerry M. Griggs - Page 16

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               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 that              






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