¶1concurring: Accepting the correctness of the majority’s premise that under applicable State law Martin’s loss was attributable to a debt that became worthless, I agree with .the result. However, with due deference, I do not read Putnam v. Commissioner, 352 U.S. 82 (1956), as having been “decided on the broader ground that payments in discharge of a guaranty are normally .to be treated as bad debt losses.”
¶2Section 166(a) allows a deduction for “any debt which becomes worthless within the taxable year.” If there is no “debt,” the section, by its terms, does not apply. In Putnam, the Court found that the guarantor acquired the requisite debt by operation of the State law of subrogation. In my view, Putnam does not treat the payment of the obligation of the guarantor as the deductible bad debt, but rather holds that, as a result of the payment, the guarantor acquired a debt which became worthless in his hands and thus deductible. If the guarantor does not acquire a debt, I do not think a guarantor’s loss is deductible under section 166.