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Respondent has disallowed petitioner's costs of goods sold
for 1991, 1992, and 1993. Petitioner bears the burden of proving
that she is entitled to the claimed costs of goods sold. Rule
142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992);
Rockwell v. Commissioner, 512 F.2d 882, 886 (9th Cir. 1975),
affg. T.C. Memo. 1972-133.
1. 1991
Petitioner has met her burden of proof as to the claimed
costs of $800 for the horse Magic and $2,280 for beef. However,
petitioner has not met her burden with respect to her claimed
costs for goats and pigs. Although petitioner subtracted $1,250
for pigs on her 1991 cost of goods sold schedule, she reported no
gross receipts from the sale of pigs. Since there was no sale of
pigs reported on the 1991 tax return, cost of goods sold for pigs
is not allowable for that year. Petitioner's testimony showed
that she was confused as to whether she had mislabeled the sale
of pigs as the sale of goats. Petitioner's return showed the
purchase and sale of 35 goats; petitioner testified that she
never owned that many goats. Since petitioner cannot establish
what was sold, she is not entitled to cost of goods sold for
those items. Accordingly, petitioner's total cost of goods sold
for 1991 is $3,080.
2. 1992
Petitioner assigned values to some animals in her beginning
and ending inventory based on her estimates of their fair market
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