Maurice E. John, Jr. and Jan E. John - Page 10

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          however, at the beginning of the year in which the taxpayer takes           
          the deduction and lose its value by the end of that year.  Sec.             
          166(a)(1); see also Dustin v. Commissioner, 53 T.C. 491, 501                
          (1969), affd. 467 F.2d 47 (9th Cir. 1972).  Therefore, even                 
          assuming arguendo that the debt was worthless because of Evans’             
          insolvency, the insolvency was not related to any identifiable              
          event in 1995.  Additionally, petitioner’s argument that Evans’             
          insolvency rendered the loan uncollectible contradicts his                  
          testimony that he expected Evans to “work his tail off” at the              
          Clinic to repay the loan, presumably from his salary, if the                
          companies failed.                                                           
               Third, to qualify as worthless, not only must a debt be                
          uncollectible at the time the taxpayer takes the deduction, but             
          the taxpayer has the burden to show it also lacks future value.             
          Dustin v. Commissioner, supra; Peraino v. Commissioner, T.C.                
          Memo. 1982-524, affd. without published opinion 742 F.2d 1437 (2d           
          Cir. 1983).  Evans’ age, educational status, income, and earning            
          potential are all relevant considerations in determining whether            
          the loan had future value.  See Cole v. Commissioner, 871 F.2d              
          64, 67 (7th Cir. 1989), affg. T.C. Memo. 1987-228; Dustin v.                
          Commissioner, supra.  Evans was in his forties in 1995 when the             
          deduction was taken, he had an M.B.A. from Vanderbilt University,           
          and he quickly found similar employment after leaving the Clinic.           
          These criteria lead us to conclude the loan had at least some               
          future value.  Petitioner has not shown otherwise.                          







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