worthless in 1984. Accordingly, we find that petitioner is not
entitled to a bad debt deduction in taxable year 1984.
Respondent's determination is sustained on this issue.
Petitioner argues in the alternative that he is entitled to
deduct the loss on his investment in Carter as a theft loss for
1984. Respondent argues otherwise. Section 165 allows as a
deduction a theft loss sustained during the taxable year and not
compensated for by insurance or otherwise. Sec. 165(a), (c)(3).
Section 165(e) provides that the deduction for such loss shall be
treated as sustained in the taxable year in which the taxpayer
discovered the loss. Sec. 1.165-8(a)(2), Income Tax Regs.
Petitioner bears the burden of proving a loss by theft, the
amount of the loss, and the year in which the loss was
discovered. Rule 142(a).
Petitioner has not met his burden of proving either the
amount of the alleged theft loss or the year in which the loss
was discovered. Accordingly, based upon the record in the
instant case, we find that petitioner has not provided sufficient
evidence to establish his entitlement to a theft loss under
section 165 for taxable year 1984.
Issue 3. Unemployment Compensation
Petitioner received unemployment compensation in the amount
of $5,312 in 1984. Section 85(a) provides that if the sum of a
taxpayer’s adjusted gross income and the taxpayer’s unemployment
compensation is greater than the “base amount”, then the amount
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