- 10 -
sec. 1.6001-1(a), Income Tax Regs. We conclude that petitioners
did not carry their burden of substantiating the amount and
purpose of either of the two bad debt deductions. Accordingly,
we hold that petitioners are not entitled to the two bad debt
deductions in the amounts of $633,897 and $4,010 for the
worthlessness of loans allegedly made by petitioners to CME/CMA.3
Under the circumstances of the instant case, we are not
required to, and we generally do not, rely on petitioner's
testimony to sustain petitioners' burden of proving error in
respondent's determinations. See Geiger v. Commissioner, 440
F.2d 688, 689-690 (9th Cir. 1971), affg. per curiam T.C. Memo.
1969-159; Wood v. Commissioner, supra; Tokarski v. Commissioner,
supra; Hradesky v. Commissioner, 65 T.C. 87 (1975). Accordingly,
we sustain respondent's determinations.
To reflect the foregoing,
Decision will be entered
under Rule 155.
3 As we stated above, in addition to disallowing the portion
of the loss carryforward on petitioners' 1990 tax return
attributable to the first bad debt deduction in the amount of
$633,897, respondent recharacterized the amount as $64,085 in
short-term capital loss and $460,526 in long-term capital loss.
Respondent argues that petitioners conceded on brief that
$158,586 should not be included in the first bad debt deduction
of $633,897. Petitioners' argument regarding the $158,586
amount, however, was premised upon the mining companies' being
treated as partnerships. As we address the bad debt deductions
on other grounds, we do not view petitioners' argument as a
concession.
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