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petitioner indicate that the parties to the loans intended
genuine debts. See id.
In order to be entitled to a bad debt deduction, petitioner
must prove that each debt had value at the beginning of 1994 and
became worthless during that year. Milenbach v. Commissioner,
106 T.C. 184, 204 (1996). There is no standard method to decide
worthlessness within the taxable year; rather, each case depends
on all its facts and circumstances. Id.; Crown v. Commissioner,
77 T.C. 582, 598 (1981). The year of worthlessness is generally
fixed by identifiable events that form the basis for reasonable
grounds for abandoning any hope of recovery. Milenbach v.
Commissioner, supra at 205; Crown v. Commissioner, supra at 598.
As for the Weinstein debt, we find petitioner has failed to
prove that any part of it became worthless during 1994. In
testimony, petitioner justified claiming the deduction in 1994
merely on the basis that it had been 5 years since he had made
the loan. However, “the fact that accounts are overdue, standing
alone, does not warrant deducting them as worthless.” Milenbach
v. Commissioner, supra at 205. Petitioner pointed to no
identifiable event that provided reasonable grounds for
abandoning hope of recovery of even a part of the debt in 1994.
Ms. Weinstein testified that she paid $60,000 in rent to
petitioner in 1994, and Mr. Finder recalled that Ms. Weinstein’s
rent payments made up “the bulk” of the $143,059 in rental income
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