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reported as one line item on the 1994 return. That rent was well
in excess of the $44,000 debt Ms. Weinstein owed petitioner,
suggesting her ability to pay. Moreover, even if Ms. Weinstein’s
successive businesses were “insolvent” at the end of each season,
as she told petitioner, she maintained the businesses as going
concerns, providing an apparent source from which to pay the
debt. Cf. Riss v. Commissioner, 56 T.C. 388, 408 (1971) (even
where liabilities of business exceed assets, fact that it
continues to operate as going concern is evidence that its debts
are not uncollectible), affd., revd. and remanded on another
issue 478 F.2d 1160 (8th Cir 1973), affd. sub nom. Commissioner
v. Transport Manufacturing & Equip. Co., 478 F.2d 731 (8th Cir.
1973). As respondent points out on brief, the fact that Ms.
Weinstein’s business, Indian Falls, failed in 1994, which might
suggest that she no longer had a source of income to pay the
debt, see Bowman v. Commissioner, T.C. Memo. 1995-259, is
unavailing to petitioner here: Ms. Weinstein began a new
business in July 1994. Thus, not only has petitioner failed to
point to an identifiable event indicating the debt was
uncollectible, the evidence shows that Ms. Weinstein had sources
from which to pay the debt. Petitioner has failed to prove the
Weinstein debt became worthless in 1994, and we sustain
respondent’s disallowance of the bad debt deduction.
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