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operations and the expenses that he alleges are associated with
this activity.42 These expenses include, inter alia, telephone
and utility bills. The record shows that petitioner, in
contradiction to his argument, did deduct expenses associated
with this property. For example, petitioner deducted $6,639,
$11,699, and $11,392 in connection with the real property as
listed on Schedule E for his 1990, 1991, and 1992 returns,
respectively. Indeed, petitioner provided no invoices to
substantiate any of the expenses he alleges that he paid on
Newark T&B’s behalf. Furthermore, petitioner failed to offer
evidence that these expenses were paid by Newark T&B and not by
Alviso or GMT.43
(B) Petitioner’s Racing Business
Petitioner also argues that he did not claim as deductions
any expenses associated with his racing business. He alleges
that he incurred expenses of $17,847.23, $15,065.23, and
42On brief, petitioner claims he is entitled to unspecified
amounts of deductions for depreciation. However, there is
insufficient evidence in the record with which we can calculate
any depreciation to which petitioner might be entitled.
43“The rule is well established that the failure of a party
to introduce evidence within his possession and which, if true,
would be favorable to him, gives rise to the presumption that if
produced it would be unfavorable.” Wichita Terminal Elevator Co.
v. Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513
(10th Cir. 1947). “This is especially true where, as here, the
party failing to produce the evidence has the burden of proof or
the other party to the proceeding has established a prima facie
case.” Id.
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