The taxpayer sustained a total loss with respect to a joint venture to buy laptops and resell them at a gain, given that a purported vendor of the laptops was engaged in fraud. The taxpayer's loss was a fully deductible loss given that he and his co-venturer attended meetings with the seller's representatives and were not mere passive investors.
However, in another transaction with the same vendor, the loss was a capital loss and not a fully deductible loss given that the taxpayer played no active role and had no knowledge of the details of the transaction, which suggested that there were no indicia of a business.