Tax Court Approves Lender's $9.5M Bad-Debt Deduction

Law360, New York (August 10, 2017, 7:54 PM EDT) -- A California money lender won the right to a federal tax deduction of $9.5 million in bad-debt losses when the U.S. Tax Court ruled on Thursday that his loans of personal funds constituted a legitimate business and bona fide debts that became worthless during the 2008 economic recession.

William Owens, the president of Owens Financial Group Inc., a mortgage-broker company that offers short-term bridge financing, also made loans from his personal assets and was denied the bad-debt loss expense on his 2008 tax return after personally...
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