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This Court generally will not consider issues that are
raised for the first time on brief, particularly where the
belated claim would prejudice a party. Rules 34(b)(4), 41(a) and
(b); Foil v. Commissioner, 92 T.C. 376, 418 (1989), affd. 920
F.2d 1196 (5th Cir. 1990); Markwardt v. Commissioner, 64 T.C.
989, 997 (1975); see also Toyota Town, Inc. v. Commissioner, T.C.
Memo. 2000-40, affd. sub nom. Bob Wondries Motors, Inc. v.
Commissioner, 268 F.3d 1156 (9th Cir. 2001). Leave to amend a
pleading should be given, however, “when justice so requires”.
Rule 41(a).
We note first that we have concluded herein that petitioner
is effectively not the owner of the dividends respondent
attributed to him from the Sam Han and Chung No. 1 accounts.
These two accounts contain $54,372 of the $67,193 in margin
interest for which petitioner seeks an offset. Moreover, the
evidence adduced by respondent in this case demonstrates that
petitioner had additional unreported income of $85,688 in 1988
that respondent nonetheless did not use as a basis to amend his
pleadings to assert an increased deficiency. In these
circumstances, we conclude that respondent would be prejudiced if
petitioner were permitted to raise for the first time on brief
his entitlement to margin interest deductions and capital losses.
Also, the belated income offsets to which petitioner might be
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