Rodney B. Burton and Patricia L. Burton v. Commissioner of Internal Revenue

The taxpayers appeal from a decision of the United States Tax Court which held that advancements of money by Rodney Burton to a business enterprise in which he had made an investment without participating in the operation or management thereof were not deductible as either a' business bad debt under Section 166 of the Internal Revenue Code or as a business expense under Section 162. The memorandum opinion of the Tax Court is reported at 34 T.C.M. 898.

Rodney Burton is president of an advertising firm whose largest client is a brewing company. The business enterprise to which Burton advanced…