No debt, no bad debt.

The Fifth Circuit affirmed a Tax Court decision about a $52 million “bad debt” deduction, observing: “Baker Hughes’ authorities all involved a bona fide debt. … No authority shown to us holds that a bad-debt deduction applies to a guarantor’s payment on a guarantee that does not create a debtor-creditor relationship with the party whose original obligation is extinguished.” Baker Hughes Inc. v. United States, No. 18-20585 (Nov. 21, 2019).