The petitioner, a real estate agent, that didn't customarily make loans and didn't hold himself out as a lender. Over a 30-year period, the petitioner made loans on less than ten occasions. The petitioner did not advertise lending services, did not have a separate office for lending services, or maintain separate books and records for loans that he made. The petitioner made an unsecured loan, made no background check of the borrower and did not seek financial information from the borrower. Ultimately, the borrower ceased paying on the loan. The petitioner merely asked for payment and did not take any further action. The borrower filed bankruptcy, but the petitioner did not file a proof of claim with the court On his return, the petitioner claimed a deduction for a business bad debt (i.e., ordinary deduction that offsets ordinary income). IRS disallowed the deduction because they claimed it wasn't incurred in connection with the petitioner's business as a real estate agent. The court agreed with the IRS, noting that the petitioner was not in the business of lending money and the debt was not a worthless debt incurred in the petitioner's trade or business. Thus, debt was a nonbusiness bad debt deductible only as a capital loss that is subject to the limitation of $3,000 annually as an offset to ordinary income). Langert v. Comr., T.C. Memo. 2014-210.