The taxpayer, who was a minority shareholder of a corporation ("Homage") engaged in a condominium development project, lent money directly to Homage as well as lending money, on a non-interest bearing basis, to a corporation ("Prescient") owned by his wife which, in turn, advanced those funds to Homage.
The Tax Court had not made a palpable and overriding error in concluding that the taxpayer had not demonstrated a nexus between the loan to Prescient and the generation of income. The loan was non-interest bearing. He was not a shareholder of Prescient and had no expectation of dividend or any right to receive any income or benefits from Prescient.