- 457 -
that either (1) some of the transactions are not bona fide
transactions for tax purposes, or (2) no loss is allowable
because the sales were to a related party, he is still entitled
to deductions for worthlessness or partial worthlessness with
respect to the assets involved. He also asserts that he is
entitled to deductions under section 165 for abandonment losses
with respect to the BK Eagle, BK Freedom, and BK Lioness
partnership interests.
To the contrary, respondent contends that, except for the
conceded capital losses, Kanter failed to meet his burden of
proof with respect to the determinations in the notice of
deficiency. Specifically, respondent argues that (1) Kanter did
not substantiate the claimed bases in the assets sold; (2) the
sales were to related buyers; (3) the sales were not arm's-length
transactions; or (4) the transactions lacked substance.
III. Analysis
To begin with, the Court disagrees with Kanter's contention
that certain statements by respondent's counsel during the trial
constituted "concessions" whereby respondent abandoned or waived
some of the grounds in the notice of deficiency disallowing the
losses the Kanters claimed. In our view, Kanter is reading the
statements of respondent's counsel out of their proper context.
These statements were made during discussions between the Court
and respondent's counsel as to some of the legal issues
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