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$10,000 “Gift” in 2003, and therefore, he was deducting it as a
“Non-Recoverable Loan or Bad Debt.”
At trial, Mrs. Sizelove testified: “it wasn’t a gift, it
was a loan. And if he ever comes into money, we will get that
money back.” She also claimed to have received a promissory note
containing provisions for interest and a sum certain; however,
the note was not introduced into evidence or shown to respondent
before trial.
Petitioners have not proven that the $10,000 “loan” to their
son was a bona fide debt. Petitioners have not shown that the
loan was proximately related to the conduct of a trade or
business. Petitioners have not shown that the loan became wholly
or partially worthless during the taxable year. Therefore,
respondent’s determination denying petitioners’ $10,000 deduction
for a bad debt is sustained.
3. Deduction for Medical and Dental Expenses
Petitioners claim to have incurred $8,460.38 in medical and
dental expenses in 2004 before subtracting 7.5 percent of their
adjusted gross income (AGI).
Respondent concedes that petitioners have substantiated
$2,551 in medical and dental expenses. Respondent contends,
however, that petitioners are not entitled to a $2,551 deduction
for medical and dental expenses because the amount does not
exceed the 7.5-percent floor.
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Last modified: March 27, 2008