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$3,785,790. On August 15, 1985, the personal residence of
petitioners was sold for $3,700,000 to satisfy creditor claims.
This residence had been purchased by petitioners for $530,000.
From the sale proceeds, the debt that was owed to Freedom Federal
in the amount of $1,750,000 plus $550,000 in past due interest
was paid in full. Ingersoll-Rand received $944,049 in partial
satisfaction of its claims. The bankruptcy estate failed to file
an estate tax return for 1985.
After filing their personal petition in bankruptcy,
petitioners moved to California. All of their personal assets,
which became the property of the bankruptcy estate, were placed
in storage. Among these items were important business documents
and tax records. Petitioners were unable to retrieve these
documents because the bankruptcy estate failed to make the proper
storage payments.
OPINION
Petitioners bear the burden of proving that the
determinations in the notice of deficiency are erroneous and that
they are entitled to any deductions claimed on their returns.
See Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84
(1992); Welch v. Helvering, 290 U.S. 111, 115 (1933). A
recurring problem for petitioners at trial was a failure to
provide adequate supporting documentation and receipts to
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