Buchanan v. United States

MEMORANDUM AND ORDER

MORAN, Chief Judge.

Plaintiffs Gordon and Mary Buchanan brought this federal tax refund action alleging an overpayment of their joint tax return for 1986 and/or 1987 in the amount of $542,-451. Plaintiffs claim that they are entitled to a deduction for those tax years under 26 U.S.C. § 166(d) for a nonbusiness bad debt. Plaintiffs and the defendant, the United States of America, have filed cross-motions for summary judgment. For the reasons set forth below, plaintiffs’ motion is granted and the government’s motion is denied.

BACKGROUND

Plaintiffs’ son-in-law, Stewart S.…