- 23 -
proceeds from the sale. Furthermore, Fallah testified that he
lacked any firsthand knowledge of any loan repayments by
petitioner. When asked, for example, if he had any knowledge as
to whether petitioner ever wired funds to any accounts controlled
by the Ben-Jabr family in repayment of the purported loan, Fallah
testified: "It was done during the life of my dad and he was the
person responsible for it. * * * My dad was alive when some
things were happening and that is all I know."
Having found that petitioner owned the automobiles in issue,
we must now consider petitioner's alternative argument that
respondent erroneously computed the cost bases of three of the
automobiles when calculating petitioner's gain. In particular,
petitioner argues that his cost bases in the 1932 Mayback
Zepplin, Serial No. 1388, and Lagonda LG-45 Repead, Serial No.
12226, were $450,000 and $80,000, respectively. In the notice of
deficiency, respondent determined a zero basis for each
automobile, because petitioner had failed to provide
documentation of his actual cost. In addition, petitioner
contends that he had a $335,000 basis in the 1936 500K Mercedes
Roadster, Serial No. 130857. Respondent determined that
petitioner's cost basis in this automobile was $100,000, based on
information provided from the seller.
Section 1012 provides that a taxpayer generally has a basis
in property equal to its cost. Petitioner bears the burden of
demonstrating that he is entitled to a basis in the automobiles
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011