Abraham and Dina Weiss - Page 7
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grouped the reasons for disallowance into three general
categories. The first is petitioners' asserted failure to
demonstrate that Oshtemo-Kalamazoo was an activity entered into
for profit. Respondent accordingly disallowed the claimed
deductions for failure to meet the requirements of sections 162,
212, and 183.
Alternatively, respondent contended that petitioners did not
establish the requisite ownership interest in the Oshtemo-
Kalamazoo program; instead, respondent determined that the
Oshtemo-Kalamazoo transactions were shams or lacked substance.
Finally, respondent determined that petitioners had not
established the cost or basis of assets amortized by the
partnership and that the cost used "was unreasonable and
excessive and was not incurred for the stated purpose and that
the assets have an indeterminate useful life."
Petitioners bear the burden of proof on all pertinent items.
See Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933). All
claimed deductions and credits are matters of legislative grace
and must have a basis in the statute. New Colonial Ice Co. v.
Helvering, 292 U.S. 435 (1934). We are not required to find that
petitioner Abraham Weiss’ self-serving testimony meets that
burden. Tokarski v. Commissioner, 87 T.C. 74, 77 (1986). Even
if respondent does not present contradictory evidence, we may
still find, on the basis of the record, that petitioners’
evidence falls short of meeting their burden of proof. Fleischer
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