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find that petitioner has failed to establish that, when he made
the Miller loan in 1986, he was in the trade or business of
either investing generally or making loans specifically.11 See,
e.g., Rollins v. Commissioner, 32 T.C. 604, 612-615 (1959), affd.
276 F.2d 368 (4th Cir. 1960). We further find on the instant
record that petitioner has failed to establish that the Miller
loan constitutes a business debt for purposes of section 166.
Accordingly, on the record before us, we hold that petitioner is
not entitled to a business bad debt deduction under section
166(a) with respect to that loan.
We consider now whether petitioner is entitled to nonbusi-
ness bad debt treatment under section 166(d) with respect to the
Miller loan. To resolve that question, we shall determine
whether the $2,641 of unrecovered principal of the Miller loan
became worthless during 1993.12 That determination also requires
a factual inquiry. See Aston v. Commissioner, 109 T.C. 400, 415
(1997).
Generally, a loan is considered worthless during the taxable
11We further find on the record in this case that petitioner
has failed to show that during 1993, the year in which petitioner
claims the Miller loan became worthless, he was in the trade or
business of either investing generally or making loans specifi-
cally.
12We note that a loss on a nonbusiness debt is to be treated
as sustained only if and when the debt has become totally worth-
less, and no deduction is to be allowed for a nonbusiness debt
which is recoverable in part during the taxable year. See sec.
1.166-5(a)(2), Income Tax Regs.
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