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District of Florida, he had no access to the funds or any of the
interest earned during that time.
In Poczatek v. Commissioner, 71 T.C. 371, 376-377 (1978),
the Court held that
It is well settled that income is taxable when it
has been actually or constructively received. North
American Oil Consolidated Co. v. Burnet, 286 U.S. 417
(1932). * * * [I]t is equally well settled that income
is not limited to direct receipt of cash (Crane v.
Commissioner, 331 U.S. 1 (1947)), and payment of a
legal obligation of a taxpayer is income to him even
though such income is not actually received by him.
Old Colony Trust Co. v. Commissioner, 279 U.S. 716
(1929); Amos v. Commissioner, 47 T.C. 65 (1966); Tucker
v. Commissioner, 69 T.C. 675 (1978).
Accordingly, the $529,298.71 of interest earned on petitioner's
funds deposited with the District Court is taxable to petitioner
in 1992 when it was received by the IRS and applied to his unpaid
tax assessments.
Issue 6. Petitioner's Losses
Petitioner next contends that he suffered various business
losses during the tax years in issue which he never claimed.
These include funds which petitioner claims were stolen from his
Panamanian bank accounts and losses on various aircraft and
business investments. Thus, petitioner claims there were
resulting net operating losses which reduce his tax liabilities.
Petitioner has the burden of proving both the right to and
the amount of the net operating loss deductions pursuant to
section 172. See Rule 142(a); Welch v. Helvering, 290 U.S. 111,
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