In Re MacFarlane

83 F.3d 1041 64 USLW 2726 , 35 Collier Bankr.Cas.2d 1272 , Bankr. L. Rep. P 77,002 , 96 Cal. Daily Op. Serv. 3363 , 96 Daily Journal D.A.R. 5487 In re Stephen MACFARLANE, Debtor. FRANCHISE TAX BOARD OF the STATE OF CALIFORNIA, Creditor-Appellant-Cross-Appellee, v. Stephen MACFARLANE, Debtor-Appellee-Cross-Appellant. Nos. 94-56064, 94-56065. United States Court of Appeals, Ninth Circuit. Argued and Submitted March 6, 1996. Decided May 13, 1996. Anthony Sgherzi, Deputy Attorney General, Los Angeles, California, for appellant-cross-appellee Franchise Tax Board of the State of California. Elmer Dean Martin III, Diamond Bar, California, for appellee cross-appellant debtor Stephen B. Macfarlane. On Appeal from the United States District Court for the Southern District of California; John S. Rhoades, District Judge, Presiding. D.C. No. CV-93-01435-JSR. Before: SKOPIL, Senior Circuit Judge, CANBY, and LEAVY, Circuit Judges. SKOPIL, Senior Circuit Judge: 1 We address in these appeals which party has the ultimate burden of proof in bankruptcy proceedings when a state files a claim for taxes alleging that a debtor's bad debt deductions are invalid. Both the bankruptcy and district courts…