*550OPINION.
Sternhagen:Sec. 234 (a) (5) of the Revenue Act of 1918 contemplates that before a taxpayer can charge a debt off and deduct it from gross income it must be determined to be worthless. That *551determination must be based upon facts. We are of the opinion that the evidence is not sufficient to establish worthlessness. The debts appear to have been charged off because a lawyer thought that collection thereof was doubtful, but the facts to justify such opinion are not before us. The only evidence before us as to the debt of the National Projector and Film Corporation is that counsel made an investigation, the nature of which is not disclosed by the evidence, which led him to believe the debtor insolvent and collection doubtful. There is no evidence that taxpayer had any information as to the assets of the debtor or as to whether the account would or would not- be paid.
As to the debt of the Cathedral Phonograph Co., it appears that after the composition agreement extending the time of payment and the execution of the promissory note by the debtor the credit manager of the taxpayer consulted counsel as to the collection of its claim. After making inquiry relative to the phonograph business in Chicago counsel for taxpayer “was very skeptical as to whether or not anything could ever be realized from the phonographs placed in storage as collateral and that chances of realizing on this account were so slim that, as a matter of practical experience in this line, it would be better to write the debt off.” No investigation was made at or prior to the time the account was charged off to ascertain the nature or value of the entire assets of the Cathedral Phonograph Co. The taxpayer charged off the account because collection in the opinion of its attorney was doubtful rather than upon facts which established its worthlessness.