Romani v. Department of Revenue

Decision for plaintiffs rendered April 30, 1985. Plaintiffs appeal from an order of the Department of Revenue denying a claimed bad debt loss on their 1981 income tax return. The facts giving rise to this appeal are largely undisputed.

Prior to 1976, Linda Romani (hereinafter "Linda") was married to Robert Lilly with whom she had two children. In 1976, Robert Lilly purchased a men's clothing store known as "Justin's Store for Men" located in North Bend, Oregon. The business was incorporated and all of the stock was purchased in Robert Lilly's name. Robert Lilly became the President of the…