-7-
We conclude from this representation that petitioner has utilized
as of January 1, 1997, all of the capital loss that he claimed in
1993, but for, at the most, $460,486. As to the $460,486, the
record does not indicate the source of that amount. The record
does not contain, for example, any of petitioner’s tax returns
from 1993 to 1996 or any credible evidence as to the gains or
losses from petitioner’s capital transactions in years before
1997. Whereas the $460,486 could possibly stem from the capital
loss on HPI stock that petitioner claimed in 1993, it could just
as easily be a carryover from a capital loss sustained in 1994,
1995, or 1996.
A loss from the sale or other disposition of property cannot
exceed the taxpayer’s basis in the property, sec. 1.165-1(c),
Income Tax Regs., and a taxpayer such as petitioner who cannot
prove his basis in his property cannot compute a theft loss
deduction, see Millsap v. Commissioner, 46 T.C. 751, 760 (1966),
affd. 387 F.2d 420 (8th Cir. 1968); Towers v. Commissioner,
24 T.C. 199, 239 (1955), affd. on other grounds sub nom. Bonney
v. Commissioner, 247 F.2d 237 (2d Cir. 1957); Heckett v.
Commissioner, 8 T.C. 841 (1947). We believe that this burden
requires that petitioner prove that he did not recognize in one
or more years before 1997 as a capital loss what he now claims as
a theft loss. Cf. Associated Dentists v. Commissioner, T.C.
Memo. 1998-287 (citing, among other cases, United States v.
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