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petitioners properly claimed a $60,000 capital loss as a result of
petitioner Santar Yei's surrender of 60,000 shares of stock in
Cirtex, Inc. (Cirtex) to Cirtex, and (2) whether petitioners are
liable for the accuracy-related penalty under section 6662.
We must also decide the following matters, which petitioners
raised in their petition: (1) Whether petitioners may reclassify as
a repayment of loans (and treat as nontaxable) $45,000 of the
$84,000 they reported as wage income; (2) whether petitioners are
entitled to an $18,241 deduction in 1989 to offset dividend income
that they received from Cirtex and reported in 1988; (3) whether
petitioners may claim bad debt deductions for: (a) a $9,100 payment
they made to Albert Chang on behalf of Cirtex to purchase his stock
in Cirtex, (b) a $1,500 loan they made to Cirtex to permit that
company to purchase shares of its stock that were owned by Ba Cac
Luong, (c) a $4,000 loan they made on Cirtex's behalf to Esstec,
and (d) $1,500 reported as income from the sale of an automobile
that petitioners claim they never received; (4) whether petitioners
are entitled to a $1,600 deduction as an unreimbursed business
expense for the purchase of Cirtex stock held by Katherine
Cunningham; and (5) whether petitioners may reduce the amount of
gain they reported from the sale of Solectron Corporation
(Solectron) stock by $19,000, which amount petitioners gave to
family members.
All section references are to the Internal Revenue Code for
the year under consideration. All Rule references are to the Tax
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