Antonio and Francesca Pecora - Page 5

                                        - 5 -                                         

               After a review of the record, we conclude that petitioners             
          are not entitled to an ordinary loss deduction under section 1244           
          in the amount of $32,500 for their purported Bis stock.  Aside              
          from petitioner's self-serving testimony, petitioners offered no            
          documentary evidence to establish that the purported Bis stock              
          qualifies as section 1244 stock, and that petitioners ever paid             
          for or received any Bis stock.  Petitioner admitted that they               
          have no records in their possession, i.e., stock certificates or            
          canceled checks, to establish their ownership and basis in Bis.             
               In their 1993 return, petitioners stated that the Bis stock            
          was purchased with cash.  At trial, when asked whether petitioner           
          invested by check or by cash, he could not recall exactly but               
          stated that some payments were by checks and that he did not                
          "think" any cash was involved.  At trial, petitioner stated that            
          he had one partner.  The correspondence from his attorney at the            
          time of the formation of Bis indicated that there were four                 
          investors.                                                                  
               Moreover, even if petitioners had established that they                
          owned section 1244 stock, there is no evidence in the record to             
          establish when such stock became worthless or that it was                   
          worthless in 1993.  Petitioner contends that Bis incurred the               
          loss when it forfeited a $60,000 security deposit given to the              
          Warwick Hotel to secure the lease.  However, petitioner                     







Page:  Previous  1  2  3  4  5  6  7  Next

Last modified: May 25, 2011