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time”. Pursuant to that regulation, the IBM sale proceeds were
constructively received by petitioner on June 17, 1988, when they
were credited to his Merrill Lynch account. Moreover, because
petitioner has failed to offer any evidence as to his holding
period for or basis in the IBM stock, the entire $27,573 is
includable in petitioner’s 1988 income as short-term capital
gain.
Petitioner’s primary argument for omitting the IBM sale
proceeds from his 1988 gross income is that he never received the
money. In essence, he alleges that the IBM sale proceeds were
taken from his account by a Merrill Lynch employee. By alleging
nonreceipt of the IBM sale proceeds, including the portion that
may have been represented by the $22,960 “withdrawal” from his
Merrill Lynch account, petitioner is, in effect, claiming a 1988
theft loss of the IBM sale proceeds rather than their
noninclusion in income.
Thomas P. McDonnell, a Merrill Lynch employee for 22 years,
who (at the time of the trial) was a Merrill Lynch vice president
and administrative manager responsible for certain “back office”
operations that occur in an office, testified that, pursuant to
Merrill Lynch’s normal practice, the IBM stock would have been
sold upon the placement of an order to sell (either by telephone
or in writing) by the legal or beneficial owner of the stock;
i.e., petitioner. Thereafter, the sale of the stock would have
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