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1994 World Billfish Series, a segment of which was devoted to
petitioners and their team, we conclude that petitioners
participated in the tournaments for pleasure and recreation
rather than the pursuit of business. This factor favors
respondent.
x. Conclusion
On the basis of our careful review of the record and our
evaluation of the nine aforementioned factors, we conclude that
PMSI did not engage in the fishing activity with an actual and
honest objective of making a profit. We sustain respondent’s
determination.
2. Bad Debt
Respondent determined that petitioners were not entitled to
the claimed bad debt deduction. Petitioners assert that the
dealership could deduct the $50,000 loan in 1995 as a bad debt
because the loan was never repaid. Petitioners assert that the
condominium when Mr. Peacock received it was worth less than the
balance on the loan and that Mr. Peacock reported on his personal
income tax return the proceeds which he received when he later
sold the condominium.
Section 166(a)(1) allows a deduction for any debt that
becomes worthless within the taxable year. A nonbusiness bad
debt is deductible only in the year it becomes totally worthless.
A deduction is not allowed for partial worthlessness. Black v.
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