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Bancshares, and Midwest Bancshares, and (3) the director and
chairman of the board of directors of Nichols Hills Bank and
Trust. As such, he was aware of the financial and business
circumstances of those organizations.
To support their position that they acted reasonably in
claiming the 1992 and 1993 deductions relating to their claimed
1992 worthless stock loss, petitioners point to the following:
(1) The parties' stipulations (a) that at the end of 1991 Na-
tional Bank of Harrah and Harrah Bancshares had a combined net
operating loss carryforward of $1,236,093 and (b) that peti-
tioner's Harrah Bancshares stock was canceled on April 6, 1993,
when Harrah Bancshares merged with Midwest Bancshares, and
(2) petitioner's testimony that "Harrah had become insolvent".
Petitioners presented no documentary or other evidence corrobo-
rating petitioner's testimony that "Harrah had become insolvent"
or clarifying the date on which petitioners claim "Harrah had
become insolvent". In addition, petitioners disregard peti-
tioner's testimony that National Bank of Harrah was an operating
bank at the end of 1992.
Based on our examination of the entire record before us, we
find that petitioners have failed to show that they acted with
reasonable cause and in good faith, or that they otherwise
exercised due care or made a reasonable attempt to comply with
the Code, when they claimed the 1992 and 1993 deductions relating
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