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On the amended tax return for 1979 petitioner claimed a loss
of $23,709. There is no evidence establishing the entity for
which the loss was claimed or any substantiation for it.
Therefore, it is disallowed.
Both the Bowling Green and Franklin Green partnerships were
on the cash method of accounting for tax purposes.
Petitioner claimed Bowling Green partnership losses of
$12,768 in 1979 and $19,073 in 1980. There are no canceled
checks, invoices, or any primary records in evidence for the
Bowling Green partnership for those years. Hence, it cannot be
determined that expenditures were made, producing the claimed
losses. Moreover, the Caspian Farm Systems' corporate journal
shows that Caspian Farm Systems disbursed or paid expenses of
Bowling Green.
Additionally, based on the Schedule K-1 of Bowling Green's
1979 return, all reported debt of $48,749 (excluding accounts
payable) was nonrecourse.
Consequently, there is no evidence of record to establish
either petitioner's basis in the Bowling Green partnership for
the years 1979 or 1980, or that he was economically at risk for
any amount contributed to the partnership. Therefore, petitioner
is not entitled to the Bowling Green partnership losses claimed
for 1979 and 1980.
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