- 9 -9
Respondent also determined (1) a 25-percent addition to tax
for failure to timely file the 1991 tax return pursuant to section
6651(a)(1) on the basis that the estimated total tax liability
reported on Form 4868 was unreasonable, and thus the automatic 4-
month extension for filing the tax return was void, and (2) an
accuracy-related penalty for substantial understatement of tax
pursuant to section 6662.
OPINION
Issue 1. Loss From Law Firm Partnership
The first issue for decision is whether petitioner was
entitled to a $121,500 loss deduction due to his withdrawal from
the Heidelberg & Woodliff law firm partnership. Petitioner asserts
that the $121,500 loss represents the value of accounts receivable
and work in progress, along with other assets, he "left on the
table" when he departed the law firm. Respondent disagrees,
contending that (1) petitioner left the law firm in 1990, and thus
there was no event in 1991 (the year in issue) upon which
petitioner could recognize a loss, and (2) assuming arguendo that
petitioner left the law firm in 1991, petitioner failed to prove
his basis in the partnership. For the reasons set forth below, we
sustain respondent's determination with respect to this issue.
In order to prevail and recognize a loss, petitioner must show
that upon withdrawing from the law firm his basis in the firm
exceeded the amount he received. Sec. 731. See Harris v.
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