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in AIM’s books corroborate petitioner’s testimony.4 Scott was a
valuable employee of AIM who needed help. Petitioner believed
Scott would repay the $14,900. We conclude that the $14,900 AIM
paid to Scott was a loan.
2. Whether the $14,900 Debt Became Worthless in 1996
To prevail, petitioners must identify some event or facts
which prove that the debt became worthless in 1996. United
States v. S.S. White Dental Manufacturing Co., 274 U.S. 398, 401
(1927); Dallmeyer v. Commissioner, 14 T.C. 1282, 1291-1292
(1950). Respondent contends that petitioners did not show that
the $14,900 debt became worthless in 1996. We disagree.
Disappearance of the debtor is a factor that can show that a
debt has become worthless. Cole v. Commissioner, 871 F.2d 64, 67
(7th Cir. 1989), affg. T.C. Memo. 1987-228; Briant v.
Commissioner, T.C. Memo. 1982-397; Acree v. Commissioner, T.C.
Memo. 1976-187. Scott disappeared in 1996. Petitioner tried
unsuccessfully to find him. Further evidence that the debt
became worthless in 1996 is that Scott told petitioner when Scott
4 Petitioner described the payments to Scott as “Loans to
shareholder” or “Accts. rec’ble - other” in AIM’s books. The
four entries that state “Loans to shareholder” are at odds with
petitioners’ position. However, the three entries that state
“Accts. rec’ble - other” are consistent with the contemporaneous
notations petitioner wrote on the checks and petitioner’s
testimony that AIM lent money to Scott.
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