Mehdi H. Hajiyani - Page 17




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          elements, he may also deduct the bad debts claimed for 1993.                
               A bad debt is deductible in the taxable year during which it           
          becomes wholly or partially worthless.  Sec. 166(a).  Generally,            
          the taxpayer must show that the debt is worthless and the year              
          the debt became worthless.  See Rule 142(a); Mueller v.                     
          Commissioner, 60 T.C. 36, 41 (1973), affd. in part, revd. in part           
          and remanded 496 F.2d 899 (5th Cir. 1974).  Petitioner has made             
          no argument that the burden of proof shifting provisions of                 
          section 7491(a)(1), effective for Court proceedings arising in              
          connection with examinations commencing after July 22, 1998, have           
          application to this case, nor has he offered any evidence that he           
          has complied with the requirements of section 7491(a)(2).                   
               Worthlessness                                                          
               There is no standard test or formula for determining the               
          worthlessness of a debt within a given taxable year; the                    
          determination depends on the particular facts and circumstances             
          of each case.  Crown v. Commissioner, 77 T.C. 582, 598 (1981).              
          The facts and circumstances must show both the fact and the year            
          of worthlessness.  Lucas v. Am. Code Co., 280 U.S. 445, 449                 
          (1930); Crown v. Commissioner, supra.  It is generally accepted             
          that the year of worthlessness is fixed by identifiable events              
          that form the basis of reasonable grounds for abandoning any hope           
          of recovery.  Crown v. Commissioner, supra at 598; Federated                
          Graphics Cos. v. Commissioner, T.C. Memo. 1992-347.  In                     






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