Dagres v. Commissioner
United States Tax Court
P, a manager of venture capital funds, lent $5 million in 2000 to S, a business associate who provided leads on companies in which the venture capital funds might invest.
Read the full summary
P, a manager of venture capital funds, lent $5 million in 2000 to S, a business associate who provided leads on companies in which the venture capital funds might invest. P and S renegotiated the loan in 2002, and S stopped making payments in 2003. In settlement of the debt, S transferred some securities to P in 2003. On P's 2003 income tax return, he claimed a $3,635,218 deduction for bad debt under I.R.C. sec. 166(a). R issued a notice of deficiency for 2003, which disallowed the deduction as a business bad debt. Held: P was in the trade or business of managing venture capital funds. His…
1Opinion of the Court
Gustafson, Judge:
On March 21, 2008, the Internal Revenue Service (IRS) issued to petitioners Todd and Carolyn Dagres 1 a notice of deficiency pursuant to section 6212, 2 determining a deficiency of $981,980 in income tax for 2003 and an accompanying accuracy-related penalty of $196,369 under section 6662(a). After Mr. Dagres’s concession that the $30,000 of interest he received in 2003 constitutes taxable income, the issues for decision are whether: (1) Mr. Dagres is entitled to a $3,635,218 business bad debt deduction for 2003 pursuant to section 166(a); and (2) Mr. Dagres is liable for the…
2Cases cited12 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Indopco, Inc. v. CommissionerSupreme Court of the United States · 1992
- Higgins v. CommissionerSupreme Court of the United States · 1941
- Commissioner v. GroetzingerSupreme Court of the United States · 1987
- Whipple v. CommissionerSupreme Court of the United States · 1963
7 more not listed; retrieve them via the Exa API.
3Cited by18 opinions
- Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension FundCourt of Appeals for the First Circuit · 2013
- Graev v. CommissionerUnited States Tax Court · 2013
- Rutter v. Comm'rUnited States Tax Court · 2017
- Peek v. Comm'rUnited States Tax Court · 2013
- Comptroller of the Treasury v. JalaliCourt of Special Appeals of Maryland · 2018
13 more not listed; retrieve them via the Exa API.