In Bercy v. Commissioner, the Tax Court held that a married couple was entitled to a Code Sec. 166 bad debt deduction. The deduction was connected to a bona fide loan the deceased husband made to an LLC. Among other things, the Tax Court found the husband was in a distinct trade or business of lending money, and therefore, the loan was a valid Code Sec. 166 business debt.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.