- 33 -
As for the Attieh Bros. debt, we reach the same conclusion.
Petitioner has not shown any identifiable event that occurred in
1994 which demonstrates the Attieh Bros. debt would not be
repaid.19 The most significant factor in our reaching this
conclusion is the fact that the Skating Palace continued to
operate as a going concern throughout 1994. See Riss v.
Commissioner, supra. Petitioner twice on brief cites the failure
of the Attieh Bros.’ business in support of his bad debt claim,
but the record establishes that the Skating Palace continued
operation until at least 1998.
In addition, we find it remarkable that the extensive
written correspondence, i.e., faxes, between petitioner and the
Attiehs concerning the loan and its repayment ends abruptly in
August 1993. The volume of this correspondence before 1993
demonstrates that it was petitioner’s and the Attiehs’ well-
established practice to communicate by fax concerning the loan.
They exchanged at least 11 such faxes in 1990, 7 in 1991, and 9
in 1992. Yet petitioner produced no faxes subsequent to an
19 Respondent disputes the amount of the debt, arguing (1)
that a portion of the $20,000 second loan amount was not part of
the debt since it was held back to pay amounts already owed by
the Attiehs to petitioner and (2) that a portion of both the
$50,000 original loan and the $20,000 second loan was equipment
rather than cash, and that petitioner, having failed to prove his
basis in the equipment, would be denied a deduction under sec.
166(b). Because we hold the entire bad debt deduction to be
disallowed because petitioner has not proven worthlessness during
the year in issue, we do not address these arguments.
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