-33--33- Petitioners bear the burden of proving that the Speck debt became worthless within the 1986 taxable year. Rule 142(a); Rockwell v. Commissioner, 512 F.2d 882 (9th Cir. 1975), affg. T.C. Memo. 1972-133; Crown v. Commissioner, 77 T.C. 582, 598 (1981). Specifically, petitioners must prove that the debt had value at the beginning of the taxable year and that it became worthless during that year. Estate of Mann v. United States, 731 F.2d 267, 275 (5th Cir. 1984); American Offshore, Inc. v. Commissioner, 97 T.C. 579, 593 (1991). There is no standard test or formula for determining worthlessness within a given taxable year. Crown v. Commissioner, supra at 598. The determination depends upon the particular facts and circumstances of the case. Generally, however, the year of the worthlessness is fixed by identifiable events that form the basis of reasonable grounds for abandoning any hope of recovery. United States v. S. S. White Dental Manufacturing Co., 274 U.S. 398 (1927); American Offshore, Inc. v. Commissioner, supra at 593; Crown v. Commissioner, supra at 598; Dallmeyer v. Commissioner, 14 T.C. 1282, 1292 (1950). Worthlessness is determined primarily by objective standards. American Offshore, Inc. v. Commissioner, supra at 594; Perry v. Commissioner, 22 T.C. 968, 973 (1954). The amounts due from Speck under the 1985 agreement were overdue, but the fact that accounts are overdue, standing alone, does not warrant deducting them as worthless. See Shippen v.Page: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Next
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