Gunnari v. Department of Revenue

CARL N. BYERS, Judge.

Plaintiff (taxpayer) appealed his 1993 personal income tax assessment. The assessment disallowed taxpayer’s claimed bad-debt deduction and an offset of gain derived from the sale of taxpayer’s principal residence.

FACTS

Taxpayer, president and one-third owner of WCA Marketing, Inc. (WCA), tried to secure a $3 million loan on behalf of WCA from an overseas investor. In order to secure that loan, $15,000 in loan fees had to be paid first. Taxpayer approached his neighbor, Lewis P. Sandoz, for a loan. Without first checking WCA’s corporate records, Sandoz loaned $5,000 to…