7
Petitioners totally failed to carry their burden of proof on
all points. Despite a great deal of generality, petitioner (who
was the only witness for petitioners) stayed well away from
mentioning any amounts of the unreported income for 1987 that had
been determined by respondent, as being erroneous, let alone
proving any such amounts. Likewise, petitioner testified to no
amounts, and offered documentary evidence as to no amounts, by
which respondent had determined excessive capital gains realized
by petitioner in 1987. Finally, petitioners totally failed to
establish that they had incurred any long-term capital losses in
excess of any realized gains, based upon the argument that the
judgments rendered against petitioner created losses that he
could deduct, and that he incurred deductible losses when his
joint venture projects were abandoned.
This failure of essential proof runs throughout each issue
in the case:
(1) As to the additional unreported income resulting from
petitioner's misapplication of trust funds and his taking of
joint venture funds for his personal uses, it is well established
that gross income for income tax purposes includes income that a
person takes or receives and that is subject to his control and
disposition, even if the income be illegally obtained. Sec.
61(a); James v. United States, 366 U.S. 213 (1961); see Rutkin v.
United States, 343 U.S. 130 (1952). Petitioner admitted that he
misappropriated joint venture funds from the trust accounts that
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011