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shareholders to claim basis. See, e.g., Estate of Leavitt v.
Commissioner, 875 F.2d 420, 422 (4th Cir. 1989), affg. 90 T.C.
206 (1988); Underwood v. Commissioner, 535 F.2d 309, 311 (5th
Cir. 1976), affg. 63 T.C. 468 (1975). In the notice of
deficiency, respondent determined that petitioner had a zero
basis in the redeemed stock. Petitioner testified that he had a
basis of $25 per share or a total of $5,225 and $1,025 for the
shares redeemed in 1993 and 1994, respectively.
In an attempt to substantiate his basis in the redeemed
securities, petitioner submitted a copy of a certificate issued
by the Citizens Federal Bank. The certificate shows that
petitioner owned 163 shares of Citizens Federal Stock, that the
stock was 8 percent Series C Non-Cumulative Preferred Stock, and
that the stock's par value was $.01. Additionally, petitioner
submitted a copy of a letter from the Citizens Federal Bank
declaring its intent to redeem some of its outstanding shares
from shareholders. This letter indicates that the redemption
price of the stock was 101 percent of the preference value, or
$25.25 per share. Petitioner did not submit any other evidence
to support his claimed basis in the redeemed shares of stock.
Petitioner's testimony regarding the purchase of the stock
at issue was vague. In fact, he was unable to provide any
details regarding his purchase of the stock other than the
claimed $25 per share purchase price that he surmised from the
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