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funds or leave petitioner poorer in a material sense. Even if
petitioner had pledged those assets as collateral for his
guaranty, courts have held that pledging of personal assets is
not an economic outlay sufficient to increase basis. See, e.g.,
Harris v. United States, 902 F.2d 439, 445 n.16 (5th Cir. 1990);
Calcutt v. Commissioner, 84 T.C. 716, 719-720 (1985).
Petitioners offer no authority for the proposition that
petitioner’s belief that he could not sell or use his personal
assets as collateral in 1996-97 was an economic outlay for
purposes of increasing his basis in Green Valley stock. We
conclude that petitioner’s self-imposed restriction did not
increase his basis in Green Valley stock.
E. Conclusion
We conclude that petitioner may not increase his basis in
his Green Valley stock in 1996-97 by the amount of his guaranties
to Green Valley creditors. Petitioner had insufficient basis in
his stock and debt in Green Valley to allow him to deduct the
losses claimed on petitioners’ 1996-97 returns. We sustain
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