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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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