Business vs Non-Business Bad Debts: Dagres vs Commissioner Presents New Variations on an Old Theme


Erik M. Jensen


In Dagres v. Commissioner, decided in March 211, the Tax Court considered the distinction between business bad debts and nonbusiness bad debts. This article discusses the particulars of Dagres, which presented some unusual issues, and it describes more generally why the distinction matters to investors and how we are supposed to tell the two categories of debt apart.


Dagres v. Commissioner, Tax Court decision, business bad debt, nonbusiness bad debt, investments

Publication Date


Document Type


Place of Original Publication

Journal of Taxation of Investments

Publication Information

73 Journal of Taxation of Investments 1 (2011)

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COinS Erik M. Jensen Faculty Bio