- 2 -
The issues for decision are: (1) Whether petitioners are
entitled to a deduction under section 162 or under section
165(e)1 for a $450,000 payment in connection with a guarantor
agreement; and (2) whether petitioners may include the $450,000
payment in computing net operating losses (NOL's) from the
bankruptcy estate of petitioner Manaharlal C. Parekh.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioners, husband and
wife, resided in Odessa, Texas, at the time they filed the
petition in this case. Petitioners filed joint Federal income
tax returns for the 1990 and 1991 taxable years.
Manaharlal C. Parekh (petitioner) is a thoracic and
peripheral vascular surgeon who practices in the Midland/Odessa
area of Texas.
1 At trial, petitioners raised for the first time the
deductibility of the $450,000 payment under sec. 165(e) as a
theft loss. We will not, as a general rule, consider an issue
raised for the first time at trial since it has not been properly
pleaded. See Estate of Mandels v. Commissioner, 64 T.C. 61, 73
(1975). When issues not raised by the pleadings are tried by
implied consent of the parties, however, the issues shall be
treated as if they had been raised in the pleadings. Rule 41(b).
The parties satisfied Rule 41(b) when they introduced the issue
at trial and acquiesced in the introduction of evidence on that
issue without objection. LeFever v. Commissioner, 103 T.C. 525,
538-539 (1994), affd. 100 F.3d 778 (10th Cir. 1996); see also
Hardin v. Manitowoc-Forsythe Corp., 691 F.2d 449, 456 (10th Cir.
1982).
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