Robert A. Read - Page 10

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          no standard test or formula for determining worthlessness within            
          a given taxable year.  Crown v. Commissioner, 77 T.C. 582, 598              
          (1981).  Worthlessness is a question of fact.  Sec. 1.166-2(a),             
          Income Tax Regs.  A debt becomes worthless in the year in which             
          identifiable events clearly mark the futility of any hope of                
          further recovery.  James A. Messer Co. v. Commissioner, 57 T.C.             
          848, 861 (1972).                                                            
               In order for us to find that petitioner qualified for a bad            
          debt deduction, petitioner must prove that his right of                     
          subrogation against VIP became worthless in 1986, the year in               
          which it is claimed as a deduction.  Putnam v. Commissioner, 352            
          U.S. 82, 85 (1956); Intergraph Corp. v. Commissioner, 106 T.C.              
          312, 324 (1996); sec. 1.166-9(e)(2), Income Tax Regs.  Petitioner           
          has not shown the futility of any hope of recovery under his                
          right of subrogation.  After the sale to Mr. Grossman, VIP still            
          had one asset, namely the replacement note.  In March 1987,                 
          petitioner, after many attempts at collection, had VIP initiate             
          suit against Mr. Grossman in order to collect on the replacement            
          note.  In September 1987, VIP amended its petition against Mr.              
          Grossman to include M&G and MBG as defendants.  In November 1987,           
          the district court for Oklahoma County decreed that petitioner              
          was entitled to a judgment, jointly and severally, against M&G              
          and MBG in the amount of $709,6604 plus interest and attorneys              

               4  Although this amount is less than the amount of the debt            

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