Fortunato J. Mendes - Page 12

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          taxpayer must present evidence that reasonably leads the trier of           
          fact to conclude that the property was stolen).  In this case,              
          petitioner has failed to establish even the reasonable likelihood           
          that the IBM sale proceeds were stolen by a Merrill Lynch                   
          employee or, indeed, by anyone.  His argument is premised solely            
          on respondent’s inability to prove that the IBM sale proceeds               
          were mailed to him or that someone at Merrill Lynch did not steal           
          those proceeds.  Respondent bears no such burden.  Petitioner               
          offers only his own testimony that he never received the IBM sale           
          proceeds coupled with his sheer speculation that, because of what           
          he perceives as Merrill Lynch’s inadequate internal procedures              
          for verifying the transmission to and receipt of money by its               
          customers, those sale proceeds must have been stolen.  Such                 
          speculation does not convince us that the IBM sale proceeds were,           
          in fact, stolen.  Petitioner has offered no evidence that the               
          Merrill Lynch procedures described by Mr. McDonnell for handling            
          stock trades and the proceeds from those trades were not followed           
          in connection with the 1988 sale of petitioner’s IBM stock.  As a           
          result, we conclude that petitioner has failed to carry his                 
          burden of proving that he sustained a 1988 theft loss within the            
          meaning of section 165.  Nor has he shown that any portion of the           
          IBM sale proceeds is otherwise deductible for that year as a loss           
          under that section.                                                         







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