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disposition of property is the excess of the amount realized over
the adjusted basis of the property. The amount realized, in this
case, is not at issue; however, the basis is at issue.
Generally, under section 1012, the basis of property is its cost.
Section 1.1012-1(c)(1), Income Tax Regs., provides generally
that, if shares of stock in a corporation are sold or transferred
by a taxpayer who purchased or acquired stock on different dates
or at different prices, and the stock sold or transferred cannot
be adequately identified, the stock sold or transferred is
charged against the earliest of such lots purchased or acquired
to determine the cost or basis of the stock and to determine the
holding period. Petitioner's situation fits within this general
provision. The documentation provided by petitioner shows that
he had 56.6504 shares in his GE account on October 26, 1994, but
the cost and dates of acquisition of these shares is not shown.
However, the documentation shows that all transactions that took
place in the account from October 26, 1994, until October 25,
1995, ranged in a price per share from $50.5625 to $62.9373. On
the basis of section 1.1012-1(c)(1), Income Tax Regs.,
petitioner's basis would be determined by the cost of the 56.6504
shares he owned as of October 26, 1994. The documentation
petitioner presented, as noted above, does not adequately
identify the cost of these shares. On this record, the Court, in
the exercise of its best judgment and discretion, based on the
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