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Petitioners also argue that the $22,000 section 1244
ordinary loss claimed on their amended 1990 joint Federal income
tax return should be recharacterized and now also be treated as a
nonsection 1244 capital loss and be available as a capital loss
carryover to 1991.
OPINION
In general, taxpayers bear the burden of proving that they
are entitled to claimed losses, and taxpayers are expected to
maintain adequate records to substantiate claimed losses. See
sec. 6001; Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933).
Respondent argues, among other things, that due to lack of
substantiation, petitioners are not entitled to any of
petitioners’ claimed bad debt and stock losses relating to Telim.
Respondent also argues that none of the funds petitioners paid to
or on behalf of Telim should be treated as loans (but rather as
part of petitioners’ investment in the capital stock of Telim)
and that whatever stock related losses petitioners incurred in
connection with their investment in Telim should be treated as
section 1244 ordinary losses for 1989 and fully absorbed in 1989
and prior years.
We agree with respondent’s argument. Petitioners have not
substantiated or established the amount of losses they incurred
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