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Castle Towers in 1992. There is no evidence in the record,
however, as to the manner in which petitioner “lost” Bonnevista
or Castle Towers, or when the corporations might actually have
ceased to exist. Petitioner testified unconvincingly that he did
not know what happened to the business records of either
Bonnevista or Castle Towers. We cannot assume that the missing
evidence would have been favorable to petitioners; to the
contrary, the usual inference is that the evidence would be
adverse. See Pollack v. Commissioner, 47 T.C. 92, 108 (1966),
affd. 392 F.2d 409 (5th Cir. 1968).
Relying on petitioner’s representations in the
March 3, 1993, CIS that he no longer owed the debts, respondent
determined that the debts were discharged on that date.
Petitioner has failed to show that respondent’s determination was
unreasonable. Cf. Cozzi v. Commissioner, supra at 447-448 (where
it is impossible to identify one, and only one event, that
clearly fixes the time of a discharge of indebtedness, the burden
is on the taxpayer to prove that the event determined by the
Commissioner to fix the time is unreasonable).
D. Do Petitioners Qualify for the Insolvency Exception?
Petitioners argue that they qualify for the exclusion under
section 108(a)(1)(B), which generally provides that gross income
does not include amounts from discharge of indebtedness if the
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