- 10 - In these circumstances, it was not arbitrary for respondent to conclude that Bonnevista and Castle Towers were still in existence in March 1993, and that petitioner’s debts to the corporations were discharged when petitioner first represented to respondent that he no longer owed the debts previously reported to be owing to his wholly owned corporations. We conclude that respondent has made the requisite minimal evidentiary showing linking petitioner to the discharge of indebtedness income in question. Accordingly, the presumption of correctness remains intact, and petitioner bears the burden of rebutting the presumption by showing that the inference of gross income from discharge of indebtedness was unreasonable. See Page v. Commissioner, 58 F.3d 1342, 1347-1348 (8th Cir. 1995), affg. T.C. Memo. 1993-398; Blohm v. Commissioner, supra at 1549. B. Net Operating Loss Deduction As regards respondent’s determination disallowing petitioners’ claimed net operating loss deduction for lack of substantiation, the requirement that respondent make a predicate evidentiary showing is inapplicable; petitioners bear the burden of proving their right to, and the amount of, the claimed deduction. See Amey & Monge, Inc. v. Commissioner, 808 F.2d 758, 761 (11th Cir. 1987), affg. T.C. Memo. 1984-642; Gatlin v. Commissioner, supra at 923.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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