Charles E. Nicholson, Jr. And Margaret K. Nicholson v. Commissioner of Internal Revenue Service

OPINION OF THE COURT

ALITO, Circuit Judge:

The genesis of this appeal is a decision by the Commissioner of the Internal Revenue Service (“the Commissioner”) to disallow certain deductions claimed by Charles and Margaret Nicholson on their 1983, 1984, 1985, and 1986 tax returns regarding computer equipment that Charles Nicholson acquired in 1983. The Commissioner maintained that the Nicholsons were not entitled to take the deductions because Charles Nicholson was not “at risk” regarding a promissory note that he gave in partial payment for the equipment. Prior to a trial before the tax court on…