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investors. Geotech decided not to drill on the Rio Blanco lease
after a seismographic test on an adjacent lease provided negative
results.
In June 1989, after the decision by Geotech not to drill on
the Rio Blanco lease, petitioner testified that he corresponded
with Geotech regarding said decision and requested: (1) A return
of his investment with interest; (2) a corresponding interest in
a similar project; or (3) stock in Geotech. Petitioner testified
that as a result of his request, he was made a general manager of
an entity petitioner referred to as Royalty Partners (Royalty).
Petitioner further testified that he received a few small
dividend checks from Royalty before it went out of business.
Other than his own testimony, petitioner submitted no evidence
that he received any interest in Royalty.
Petitioner testified that after Royalty went out of
business, he had a conversation with a representative from
Geotech who promised petitioner stock in Geotech. Petitioner
never received the Geotech stock. Petitioner testified that
Geotech went out of business in 1991.
On his 1991 joint Federal income tax return, petitioner
claimed an $18,750 ordinary loss and attached Form 4797, Sales of
Business Property, which reflected said loss. The $18,750
ordinary loss was the result of petitioner's investment in
Geotech.
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Last modified: May 25, 2011