Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan lays an oldie-but-goodie on Anthony J.A. Bryan, Jr., a.k.a. Anthony Bryan, Jr., John A. Bryan, or John Bryan, Jr., T. C. Memo. 2023-74, filed 6/20/23. You must have skin in the game.

To take NOLs per Section 172, you must have suffered a real economic loss. That does not mean buying into a couple LLCs (hi, Judge Holmes) doing movie production deals with nonrecourse promissory notes on which you never pay interest or principal. And the membership interests you get in said LLCs include no requirement to make good shortfalls in your capital accounts, pay any LLC obligations, or be obligated for cash calls.

For the promissory note story, see my blogpost “A Sour Note,” 9/3/14.

AJAB ran no risk, so gets no benefits. Ms. AJAB gets innocent spousery.

Y’know, maybe a few interest payments could save the day, and a less-insulating operating agreement might help, too. Remember, dodging highroller: pigs git fed, hogs hit et.