A taxpayer in a venture to develop condos and townhouses lost his $1.3 million investment and wasn’t paid the $730,000 owed for services when the SEC nabbed his partner for running a Ponzi scheme. While he could write-off his investment, the Tax Court said he couldn’t deduct his unpaid services. The services had no basis (he never included them in income), so he couldn’t deduct the unpaid amount.
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