worthless securities
Court Says Partnership is Worth Less, Not Entirely Worthless
The IRS often challenges tax loss deductions. In many cases, it does so by challenging the year in which the loss is allowable. It can be difficult to determine which year the loss should be taken. When an asset is losing value over time, there is a…
Documenting Loans to Closely-Held Corporations
In Norgaard v. United States, No. 16-12107-FDS (D. Mass. 2018), the court addressed whether a personal loan made to a closely held corporation can be deducted as a bad debt when the business goes out of business. The case highlights …
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Cease-and-Desist Order Not Sufficient Evidence for Bad Debt Deduction
In Sensenig v. Commissioner,T.C. Memo. 2017-1, the court considers whether an investment fund is entitled to a bad debt deduction for cash-hungry start-up companies the fund had invested in when securities regulators barred the investment fund from raising money needed to sustain the start-up companies. The court considers whether the receipt of a cease-and-desist order […]
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