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to contributions made to CJP Systems prior to its incorporation,
which may be carried over. Petitioners, however, have failed to
provide a theory under which they could deduct the loss under
these facts.
Taxpayers are required to maintain records that are
sufficient to enable the Commissioner to determine their correct
tax liability. Sec. 6001; Hradesky v. Commissioner, 65 T.C. 87,
90 (1975), affd. 540 F.2d 821 (5th Cir. 1976); sec. 1.6001-1(a),
Income Tax Regs.
Petitioners have not made any comprehensible argument or
produced sufficient evidence to show that they actually incurred
a loss and that the loss is deductible as other than a capital
loss, and there is nothing in the record that would lead us to
conclude that the claimed loss is deductible as an ordinary loss.
Respondent’s determination is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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Last modified: May 25, 2011