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A taxpayer is required to maintain records sufficient to
show whether he or she is liable for Federal income taxes. Sec.
6001. Petitioner has not provided any invoices from contractors
or canceled checks showing the billing or payment of any cost.
No documentation other than the foreclosure has been presented
with respect to petitioner’s cost basis in the structure.
Petitioner testified that he lacked adequate records to
substantiate his costs because his records were stolen in 1991.
Petitioner did not try to reconstruct his records from other
sources.25 Instead, petitioner offered his own testimony, the
testimony of his son, Mark Tietig, and a letter from an architect
to substantiate his claimed cost basis in the Miami property.
Petitioner’s testimony included his personal estimates of
the actual cost to build the structure based on a price per
square foot. Petitioner’s estimates were derived by taking the
basis figure reported on a depreciation schedule prepared for
Eureka Field Nursery’s 1985 Form 1120S and then backing into this
figure by estimating the square footage cost of the structure.
24(...continued)
assignment of error shall be deemed to be conceded. Rule
34(b)(4). Therefore, no adjustment to the recovery period
applied in the notice of deficiency is required.
25Petitioner testified that he could not locate the general
contractor. However, he did not attempt to contact any of the
subcontractors even though he knew them by name and, in some
instances, had written checks payable to both the general
contractor and the subcontractor.
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