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Tax Court Rules That Advance to Business Resembled Investment and Not a Debt
A business consultant who loaned $200,000 to a contractor to build two houses made an investment, not a deductible business bad debt.
The tax court found the taxpayer liable for accuracy - related penalties in attempting to mislabel the transaction. The court examined each of the 11 factors previously enunciated by the courts.
The citation is Edward Provost v. Commissioner, TC Memo, 2000-177.
Source: Investment News, June 26, 2000
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