Cox v. Commissioner

WISDOM, Circuit Judge:

Mr. and Mrs. Richard Cox, plaintiff/appellants, appeal a decision of the United States Tax Court upholding the findings of the Commissioner of Internal Revenue (Commissioner) regarding the plaintiffs’ 1987 tax return. The plaintiffs challenge the Commissioner’s decision to disallow their bad debt deduction for a loan to their wholly-owned corporation. Additionally, the plaintiffs assert that a nonjudicial foreclosure on their personal property, which they pledged as security for a loan to their corporation, also qualifies as a bad debt deduction or, alternatively, did…