- 11 -
T.C. 848, 861 (1972). When or whether a debt became worthless is
a question of fact, the answer to which lies in an examination of
all the circumstances. Boehm v. Commissioner, 326 U.S. 287, 293
(1945); Estate of Mann v. United States, supra at 275; Dallmeyer
v. Commissioner, 14 T.C. 1282, 1291 (1950). The taxpayer must
show some identifiable event which proves worthlessness in the
year claimed. United States v. S.S. White Dental Manufacturing
Co., 274 U.S. 398, 401 (1927); Dallmeyer v. Commissioner, supra
at 1291-1292. There is no standard test or formula for
determining worthlessness within a given taxable year; the
determination depends upon the particular facts and circumstances
of the case. Lucas v. American Code Co., 280 U.S. 445, 449
(1930); Crown v. Commissioner, 77 T.C. 582, 598 (1981); Dallmeyer
v. Commissioner, supra at 1291.
On balance, we believe that petitioner's ability to recover
anything from Time To Share or Sheldon became fully worthless in
December 1990. Time To Share's business was gone, as were its
assets. Indeed, the constant need of Sheldon to borrow funds and
his submission of a worthless check were strong clues that
petitioner would not get his money back. Sheldon's letter and
disappearance in December of 1990 solidified the view that
nothing would be recovered. Moreover, Sheldon confirmed this by
testifying credibly that he was insolvent at the end of 1990.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011