- 9 - pyrite. See sec. 1.183-2(b)(2), Income Tax Regs. In addition, petitioner generated significant tax benefits by offsetting losses from his meteorite and pyrite collection activity against his income from interest, dividends, and other sources and thereby reported no Federal income tax liability. See sec. 1.183-2(b)(8), Income Tax Regs. All of these factors favor respondent's position that petitioner's activity was not engaged in with the requisite profit objective. In addition to concluding that petitioner engaged in his meteorite and pyrite collection activity without the requisite profit objective, we agree with respondent that petitioner failed to substantiate the expenses claimed on his Schedules C. Taxpayers are required to prove their entitlement to any deduction claimed, including the fact of payment. See Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115 (1933); Hradesky v. Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976). Petitioner would have us believe that he paid $83,994 in 1995 and $64,035 in 1996 as "salvage from salvagers".9 However, petitioner's testimony was bizarre if not 9 In testimony before the Court in his case involving the taxable years 1992, 1993, and 1994, petitioner described the "salvagers" as junior high school students who sold minerals to him after he had disclosed the minerals' location to the students.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
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