Carl W. and Barbara H. Patterson - Page 10

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               Petitioners reported zero taxable income on their income tax           
          return for 1992, and they paid no income tax for that year.                 
               In the notice of deficiency, respondent determined that                
          petitioner's transaction with Mr. Suiter "closed" in 1990 and               
          that the $30,000 loss was therefore not deductible in 1992.                 
               In their petition, petitioners alleged that they were                  
          entitled to deduct a $30,000 loss in 1992.  Petitioners also                
          alleged that "The additional $25,000 was not included but is                
          alleged as an additional loss in 1992 for abandonment" and that             
          "an additional abandonment loss in the amount of $25,000 has also           
          occurred in 1992 resulting in a refund and carryback and                    
          carryforward loss."3                                                        
               As a general rule, the Commissioner's determinations are               
          presumed correct, and the taxpayer bears the burden of proving              
          that those determinations are erroneous.  Rule 142(a); INDOPCO,             
          Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering,           
          290 U.S. 111, 115 (1933).                                                   
               Section 165(a) permits a taxpayer to deduct "any loss                  
          sustained during the taxable year and not compensated for by                
          insurance or otherwise."  Only a loss "sustained during the                 
          taxable year" may be deducted under section 165(a).  Petitioners            

          3  We find that the $25,000 loss was sufficiently alleged in                
          the petition to give respondent fair notice of the total amount             
          of loss claimed by petitioners in this case for the taxable year            
          in issue.                                                                   

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