-34-
to show a debtor-creditor relationship and that any such debt
became worthless in the taxable year.
Petitioner bears the burden of proving that respondent's
determination is in error by showing that he is entitled to a bad
debt loss. Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933).
Although petitioner provided evidence reflecting that funds were
advanced to Mr. Pritchett during 1982, there has been no showing
that any debts due from Mr. Pritchett or investments in Mr.
Pritchett’s enterprises became worthless during 1986 or any other
year currently before the Court. Accordingly, we hold that
petitioner has not shown his entitlement to a $35,000 bad debt
loss in connection with Mr. Pritchett for the 1986 taxable year.
Issue 6. Whether Petitioner Is Liable for Additions To Tax for
Fraud or, in the Alternative, Additions to Tax for Negligence and
Delinquency
Respondent determined an addition to tax for fraud in each
of the 5 taxable years before the Court. In addition to the
issues on which fact findings have already been made, respondent
relies on stipulated matters which were resolved due to
petitioner’s concessions.
During July 1988, petitioner negotiated the sale of the 3071
Harrington real property (Harrington property) and entered into
an escrow agreement with Hanmi Escrow Co. (Hanmi). During August
1988, petitioner negotiated the sale of the 1149 Virgil real
property (Virgil property) and entered into an escrow agreement
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