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We disagree with petitioner's claim that he may deduct his
reported loss of $170,040. An individual may deduct an uninsured
loss sustained during the taxable year if the loss was incurred:
(1) In a trade or business or a for-profit transaction or (2) on
account of a casualty or theft. Sec. 165(a), (c). A loss "must
be evidenced by closed and completed transactions, fixed by
identifiable events, and * * * actually sustained during the
taxable year." Sec. 1.165-1(b), Income Tax Regs; see also
sec. 1.165-1(d)(1), Income Tax Regs. The deduction for a loss is
limited to the individual's basis in the underlying asset, as
determined under section 1011, see sec. 165(b); Leighton v.
Commissioner, T.C. Memo. 1995-515, affd. without published
opinion 108 F.3d 332 (5th Cir. 1997); Fisher v. Commissioner,
T.C. Memo. 1986-141; sec. 1.165-1(c), Income Tax Regs., and the
individual bears the burden of proving his or her basis,
Millsap v. Commissioner, 46 T.C. 751, 760 (1966), affd. 387 F.2d
420 (8th Cir. 1968). A loss cannot be computed where the
individual's basis in the asset is not proven. Towers v.
Commissioner, 24 T.C. 199, 239 (1955), affd. on other grounds sub
nom. Bonney v. Commissioner, 247 F.2d 237 (2d Cir. 1957); Heckett
v. Commissioner, 8 T.C. 841 (1947); see also Fisher v.
Commissioner, supra.
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