- 30 -
what his basis in the assets was at the time of contribution.16
After considering all of the evidence, we conclude that
petitioner's basis in GAPS was $1,000.
On the JJM Schedule L, $1,000 is shown as petitioner’s
original capital contribution. Petitioners also claim that
petitioner transferred the proceeds of a bank account, totaling
$20,000, to JJM. We do believe that this account was
transferred. Unlike the GAPS accounts, there is no indication
that this account was a flow-through account. Therefore,
petitioner’s basis in JJM was increased by the bank account
contributed. Petitioner also claims to have transferred $37,000
in furniture and equipment. Although we believe that petitioner
contributed this property to JJM, petitioners have not proven
what petitioner's basis in the assets was at the time of
contribution. There is insufficient evidence to justify
increasing petitioner's basis by any amount on account of this
transfer.17
16We note that petitioners could have argued that the Cohan
rule may be used to estimate petitioner's basis in the furniture
and equipment at the time of transfer. Cohan v. Commissioner, 39
F.2d 540 (2d Cir. 1930). However, even if petitioners had raised
this argument, they would have had to provide some reasonable
evidentiary basis for estimating petitioner's basis under Cohan.
Polyak v. Commissioner, 94 T.C. 337, 345-346 (1990); Vanicek v.
Commissioner, 85 T.C. 731, 743 (1985). Petitioners failed to do
so.
17See supra note 16.
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