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asset; i.e., his stock in the company. Furthermore, in the
notice of deficiency respondent reduced petitioner's reported
gain from the sale of the Diesel Power stock to reflect what
respondent then understood petitioner had received.
Similarly, for 1981 petitioner claimed on his return that
his tax was zero, also due to his claim of right theory, even
though taxable income shown on the filed return was $315,928.
There is no evidence in the record of what amount petitioner paid
to Mr. Khalatbari in settlement of the litigation or to what
items the repayment was attributable. The only evidence is the
return and some vague statements by the return preparer that he
determined an amount had been paid that could give rise to a
section 1341 calculation. There is no evidence of record of how
the amount was calculated because the Court did not admit Joint
Exhibit 556-UJ into evidence. Accordingly, we hold that
petitioner is not entitled to reduce 1979 reported income by
$348,350.
VI. Issue 10--Claimed Schedule C Business Expense Deductions
In the notices of deficiency covering the years 1973 through
1981 respondent disallowed substantial business expense
deductions on three grounds, namely: (1) That they had not been
substantiated; (2) that they were not shown to be ordinary and
necessary; or (3) that they were not shown to be petitioner's
expenses, but were those of another taxpayer. Petitioner
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