- 4 -
as a sluice box. Any gold found would remain in the sluice box,
and the remaining material was returned to the river. Petitioner
thereafter refined the material from the sluice box at his home
and garage.
Whatever gold petitioner refined was stored in glass vials
that held 1, 2, or 3 ounces each. Other than these vials,
petitioner did not keep records of the amounts of his gold
recoveries. He usually kept the vials in ammunition boxes buried
underwater near his mining sites. In 1995, petitioner brought
his gold home to bottle and weigh it, and it was stolen from a
desk at his home. A police report was filed. Petitioner
estimates that the gold that was stolen was worth $32,000.3
Following the theft to the time of trial, petitioner amassed
approximately 2-1/2 pounds of gold, measured 12 troy ounces to
the pound.4 Petitioner sold $770, $1,540, and $585 worth of
gold in 1994, 1995, and 1996, respectively, which he reported on
his income tax returns for those years. In each of the years
1997 through 2000, petitioner sold less than $2,000 worth of
gold. In the years at issue, petitioner made all of his sales to
3 Petitioner did not claim a casualty loss deduction for
the theft, and that question was not presented to the Court.
4 Petitioner estimated his accumulated gold to be worth
approximately $8,400 at the time of trial.
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