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establishes that the debt had value in 1993 and became worthless
in that same year. We disagree.
In ascertaining total worthlessness, the potential ability
to pay has a bearing, and we have no evidence that such potential
did not exist herein. See Pierson v. Commissioner, 27 T.C. 330,
339 (1956), affd. 253 F.2d 928 (3d Cir. 1958). Although Estes
appeared to become insolvent sometime before 1993, insolvency
would not show the debt was totally worthless. See Roussel v.
Commissioner, 37 T.C. 235, 245 (1961). An excess of liabilities
would show no more than that the debts of Estes were probably
uncollectible in part. See Trinco Indus., Inc. v. Commissioner,
22 T.C. 959, 965 (1954). It is clear that Estes had some assets,
as in 1993 he transferred to petitioner title to his boat, which
Estes testified was his only remaining asset. After this
transfer, petitioner's attorney advised him that further
collection activity would be futile. Accordingly, we find that
the debt became wholly worthless in 1993.
To reflect the foregoing,
Decisions will be entered
under Rule 155.
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