Rudolph H. Beaver - Page 8

          Olympic Radio & Television, Inc., 349 U.S. 232, 235 (1955), and             
          Jones v. Commissioner, 25 T.C. 1100, 1104 (1956), revd. and                 
          remanded on other grounds 259 F.2d 300 (5th Cir. 1958), for the             
          requirement that a taxpayer seeking to deduct a net operating               
          loss (NOL) carryover must establish that the NOL was properly               
          applied in the later year).  To the extent that petitioner has              
          recognized before 1997 the full capital loss claimed on the stock           
          for 1993, he has recovered his entire basis in that stock so that           
          he now lacks any basis to deduct as a theft loss for 1997.  See,            
          e.g., Carloate Indus., Inc. v. United States, 354 F.2d 814 (5th             
          Cir. 1966); United States v. Koshland, 208 F.2d 636 (9th Cir.               
          1953); Robinson v. Commissioner, 12 T.C. 246 (1949), affd. 181              
          F.2d 17 (5th Cir. 1950).  Given the record at hand, we cannot               
          determine in any manner what portion, if any, of the capital loss           
          has not been recognized.2                                                   
               We conclude that petitioner is not entitled to any of the              
          claimed theft loss deduction and hold for respondent.  In so                
          concluding, we have considered all arguments made by the parties            

               2 Petitioner testified that he has never received any                  
          benefit from his deduction of the $2,816,540 for 1993.  On the              
          basis of the record as a whole, including our observation and               
          perception of petitioner while he testified at trial, we find               
          this testimony incredible and decline to rely upon it.                      
          Neonatology Associates, P.A. v. Commissioner, 115 T.C. 43, 84               
          (2000), affd. 299 F.3d 221 (3d Cir. 2002).                                  

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