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guilty to New York felony charges of enterprise corruption and
grand larceny.
OPINION
Petitioner argues that he may deduct for 1997 a theft loss
of $2,816,540. Petitioner recognizes that he deducted this loss
as a capital loss in 1993. Petitioner asserts that the fact that
he discovered in 1997 that the loss was attributable to a theft
means that he now can deduct the loss as a theft loss for 1997.
Respondent’s determinations in the notice of deficiency are
presumed correct, and petitioner must prove those determinations
wrong in order to prevail. Rule 142(a); Welch v. Helvering,
290 U.S. 111, 115 (1933). Petitioner also must prove that he is
entitled to his claimed theft loss deduction. New Colonial Ice
Co. v. Helvering, 292 U.S. 435, 440 (1934). Whereas section
7491(a) in certain cases shifts the burden of proof to the
Commissioner, we conclude that this is not one of those cases.
Among other things, we note that petitioner has neither asserted
that respondent bears the burden of proof as to the issue at
hand, nor disputed respondent’s assertions that the burden of
proof lies with petitioner.
Petitioner’s theft loss deduction requires that we focus
primarily on section 165. Section 165(a) allows a deduction for
any loss sustained during the taxable year that is not
compensated for by insurance or otherwise. In the case of an
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