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"opportunity cost". In this regard, petitioner argues that his
basis in the note, for the purpose of determining loss from the
transaction, should include not only the unpaid principal as
allowed by respondent, but also the interest which CGCC should
have paid to petitioner under the terms of the note. Petitioners
cite no case or statute to support this position. We find that
petitioners have failed to establish that petitioner's basis in
the note was greater than $5,700, the amount determined by
respondent.4 Rule 142(a). We, therefore, sustain respondent on
this issue.
(b) Sale of the Simsbury Property
During the 1993 tax year, Mr. Kostochko, in the capacity of
trustee, sold property located at 48 Country Road, Simsbury,
Connecticut, for the amount of $69,700. Petitioner and Mr.
Kostochko maintain that they shared equal ownership in the
property as partners.5 On Schedule D of their 1993 return,
petitioners indicated that petitioner's share of the sale
4 We also note that a taxpayer cannot claim a deduction
with respect to a worthless debt arising from unpaid wages,
salaries, fees, rents, and similar items of income which have not
been reported by the taxpayer as income. Sec. 1.166-1(e), Income
Tax Regs. This principle applies to interest owed to a taxpayer
but never reported as income. W.L. Moody Cotton Co. v.
Commissioner, 2 T.C. 347, 353-357 (1943), affd. 143 F.2d 712 (5th
Cir. 1944). Therefore, we could sustain respondent's
determination on this basis as well.
5 There is no partnership tax return or partnership
agreement in the record. We assume that the parties were co-
owners of the property in question.
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