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petitioner and contains the notation "V.B.H. Investment". In the
year-to-date general ledger (ledger) for GSCH for the period
ended November 30, 1985, an asset account is shown under account
number 205 and is titled "Investment-Vosburg Hotels Inc."
Moreover, on the Schedule L of GSCH's corporate tax return, there
is an entry listed as an "investment" in the amount of $25,000.
From these records, one would logically conclude that the $25,000
represents GSCH's investment in Vosburg, rather than petitioners'
investment.
Petitioners also rely on checks drawn on bank accounts at
Bank of America and Wells Fargo Bank, which they referred to as
the "Entity Control Master Account". These accounts, however,
were corporate bank accounts in the names of "Oliver Q. Foust,
Accountancy Corporation DBA, O. Quay Financial Management
Corporation" and "Oliver Q. Foust, An Accountancy Corporation",
respectively. None of the checks were written on a personal bank
account.
Based on this record, we conclude that petitioners have not
presented sufficient evidence to prove that they personally
invested any funds in Vosburg. In fact, the checks and the
corporate accounting records on which they rely indicate that the
corporations treated the disbursements to Vosburg as assets of
the particular corporation. Consequently, petitioners have
failed to demonstrate the necessary economic outlay to prove
basis. They are not entitled, therefore, to deduct any losses
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