Legal Claim From the facts provided, it appears th

It has been held that a guarantor required to pay under his guaranty may deduct payment as a bad debt if the guarantor is subrogated to the creditor's claim against a debtor from whom recovery is impossible. See Thomas Watson v. Comm., 8 T.C. 569, 576 (1947); Alice duPont Ortiz v. Comm., 42 BTA 173 (1940); aff'd on other grounds sub nom., Wilmington Trust Co. v. Helvering, 316 U.S. 164 (1942). The Supreme Court has held that when a guarantor pays a debt, the debtor's obligation to the creditor becomes an obligation to the guarantor rather than a new debt, as a result of the subrogation from the shift of the original debt from the creditor to the guarantor. Putnam v. Comm., 352 U.S. 8 (1956). In such cases, the guarantor must prove that the guaranty was bona fide and that the right to recover was worthless. Wincorn v. U.S., 61-1 U.S.T.C. ¶9212 (N.D. Tex. 1961).

In Jack's case, he became subrogated to the creditor's claim because he formally guaranteed the line of credit extended by the bank to Larry and was forced to make the first $10,000 payment on the

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upon its nature and purpose. IRS Publication 78 lists organizations which have been determined to be qualified organizations by the IRS. Such organizations include governmental organizations in situations where the contribution was for an exclusively public purpose. IRC § 170(c)(1); see McConnell v. Comm., T.C. Memo 1988-307 (1988). They also include corporations, trusts, community chests, funds, or foundations which are created and organized within the U.S.; organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes; whose net earnings do not inure to the benefit of any private shareholder or individual; and whose activities do not include attempts to influence legislation or participate in or intervene in any political campaigns. IRC §170(c)(2). Either of the intended donees of the Jones' gun collection would most likely be considered qualified donees. A museum would be included in above-named organizations organized and operated exclusively for scientific, literary, or educational purposes (or public purposes for governmental organizations). A church would be included in above-named organizations operated for exclusively religious purposes. The next issue is the value
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