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futile. Magnus, Mabee & Reynard, Inc. v. Commissioner, 1 B.T.A.
907 (1925).
We also find strange petitioner’s claim for bad debt 9 years
after the purported debt became due. When the Court asked
petitioner why he waited until 1996 to claim the loss, petitioner
answered: “I just realized at that point in time I was never
going to get the money and somebody mentioned that it was a tax
write off.”
Based upon the above, we find that the petitioners failed to
prove that the loan was a bona fide debt and that the debt became
worthless in 1996. Accordingly, petitioner is not entitled to
the bad debt loss during the years in issue. Respondent is
sustained on this issue.
Schedule A Deductions
Deductions are a matter of legislative grace, and the
taxpayer bears the burden of proving the entitlement to any
deduction claimed. INDOPCO, Inc. v. Commissioner, 503 U.S. 79,
84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440
(1934).4 A taxpayer is required to maintain records sufficient
to establish the amount of his or her income and deductions.
Sec. 6001; sec. 1.6001-1(a), (e), Income Tax Regs.
Section 162(a) allows a taxpayer to deduct all ordinary and
4 Sec. 7491 does not alter the taxpayer’s burden of proof
where the taxpayer has not complied with all substantiation
requirements. Higbee v. Commissioner, 116 T.C. 438, 442 (2001).
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