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prepared both the partnership return and petitioners’ individual
return, making it particularly difficult to construe either as
corroboration for the other.
Petitioners also point out that the combined financial
report for LeBouef Company and LeBouef Company, Inc., contains an
unaudited financial statement for Toro Leasing reflecting a line
item of $104,747 for “Loss on disposal of fixed assets”.
However, such statement again is merely a representation by
management and falls far short of proving that specific business
property was disposed of at a loss correlating to that shown on
the Schedule K-1 and petitioners’ Form 4797.
We simply lack any documentary evidence, such as receipts,
bills of sale, or partnership books and records, to affirmatively
establish that the items of business property listed on the
partnership return were in fact acquired and sold at the amounts
claimed. Hence, petitioners have failed to establish even that
the purported loss was sustained by Toro Leasing. We hold that
petitioners are not entitled to deduct the $19,791 reported on
their Form 4797.
V. Section 6651(a)(1) Addition to Tax
Section 6651(a)(1) imposes an addition to tax for
delinquency in filing returns and provides in relevant part as
follows:
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