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worthless, but also for assets that have become worthless, with
or without having been abandoned." Echols v. Commissioner, supra
at 211 n.1.
Whether the noncompetition agreements became worthless
during FYE March 31, 1996, is a question of fact. See Boehm v.
Commissioner, supra at 293. The general requirement that losses
be deducted in the year in which they are sustained calls for a
practical, not a legal, test. See Lucas v. Am. Code Co., 280
U.S. 445, 449 (1930). In Echols v. Commissioner, supra at 213,
the court stated:
the test for worthlessness is a combination of
subjective and objective indicia: a subjective
determination by the taxpayer of the fact and the year
of worthlessness to him, and the existence of objective
factors reflecting completed transaction(s) and
identifiable event(s) in the year in question--not
limited, however, to transactions and events that rise
to the level of divestiture of title or legal
abandonment.
See also Middleton v. Commissioner, 77 T.C. 310, 322 (1981)
(there is no requirement that a taxpayer relinquish title in
order to establish a loss if such loss is reasonably certain in
fact and ascertainable in amount), affd. per curiam 693 F.2d 124
(11th Cir. 1982).
To determine whether a taxpayer is eligible for a loss
deduction pursuant to section 1.165-1(d)(1), Income Tax Regs.,
the focus of this Court's analysis must be on objective events
confirming the taxpayer's subjective determination that the asset
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