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defaults, payment of interest, and sluggish business conditions.
Id.
Petitioners rely on the Christophers' poor financial
condition as proof that the debt became worthless during 1990.
But the evidence of worthlessness upon which they rely is tenuous
at best. For example, some of the factors which caused them to
consider the debt worthless in 1990 are: (1) They heard rumors
the Christophers were experiencing financial problems in 1990 and
had sought help through various local charities; (2) they
believed Mr. Christopher was "out of work" in 1990; (3) the
Christophers sold their flower shop in 1991; (4) the
Christophers' home was foreclosed after 1990; (5) the
Christophers asked petitioners not to cash their checks; and (6)
the Christophers said they could not repay the debt. However,
the test for worthlessness is objective, not subjective. Redman
v. Commissioner, 155 F.2d 319, 320 (1st Cir 1946), affg. a
Memorandum Opinion of this Court. Petitioners' belief that the
Christophers were unable to pay their debt was based on
subjective concerns rather than the objective view of the
Christophers' financial inability to pay. An examination of
the facts shows that petitioners had a significant hope for
recovery of at least a portion of the amount loaned to the
Christophers. Although they discussed repayment of the $6,000
loan with the Christophers in December 1990, they did not
persistently press them for payment. The Christophers sold their
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