Rudolph H. Beaver - Page 5

          guilty to New York felony charges of enterprise corruption and              
          grand larceny.                                                              
               Petitioner argues that he may deduct for 1997 a theft loss             
          of $2,816,540.  Petitioner recognizes that he deducted this loss            
          as a capital loss in 1993.  Petitioner asserts that the fact that           
          he discovered in 1997 that the loss was attributable to a theft             
          means that he now can deduct the loss as a theft loss for 1997.             
               Respondent’s determinations in the notice of deficiency are            
          presumed correct, and petitioner must prove those determinations            
          wrong in order to prevail.  Rule 142(a); Welch v. Helvering,                
          290 U.S. 111, 115 (1933).  Petitioner also must prove that he is            
          entitled to his claimed theft loss deduction.  New Colonial Ice             
          Co. v. Helvering, 292 U.S. 435, 440 (1934).  Whereas section                
          7491(a) in certain cases shifts the burden of proof to the                  
          Commissioner, we conclude that this is not one of those cases.              
          Among other things, we note that petitioner has neither asserted            
          that respondent bears the burden of proof as to the issue at                
          hand, nor disputed respondent’s assertions that the burden of               
          proof lies with petitioner.                                                 
               Petitioner’s theft loss deduction requires that we focus               
          primarily on section 165.  Section 165(a) allows a deduction for            
          any loss sustained during the taxable year that is not                      
          compensated for by insurance or otherwise.  In the case of an               

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