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entrepreneur. His investment decision was not the result of
Minkow’s misrepresentations.
Petitioner points out that Minkow’s repeated personal
contacts with petitioner differentiate this case from most cases
where an investor buys publicly traded stock. See, e.g., Paine
v. Commissioner, 63 T.C. at 740; Crowell v. Commissioner, T.C.
Memo. 1986-314; De Fusco v. Commissioner, T.C. Memo. 1979-230;
Barry v. Commissioner, T.C. Memo. 1978-215. Petitioner maintains
that he bought ZZZZ Best stock based not on his own analysis or
that of a broker, but based on Minkow’s intentional
misrepresentations to petitioner. We disagree for the reasons
stated above.
Petitioner has not shown that there was a theft under
section 514.040 of the Kentucky Penal Code because Minkow did not
try to convince petitioner to buy ZZZZ Best stock and because
petitioner’s decision to buy the stock was not made in reliance
on Minkow’s representations. Therefore, we conclude that
petitioner may not deduct his loss on ZZZZ Best stock as a theft
loss.
In view of our holding, we need not reach respondent’s
argument that petitioner had a reasonable prospect of recovery at
the end of 1987.
B. Petitioner’s Dividend Income and Petitioner Corporation’s
Travel and Entertainment Expenses Deduction
1. Petitioner’s Evidence
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