- 9 -
On brief, petitioner contends that he has established
adjusted basis in Marc stock and debt of $645,535 as of
December 31, 1997.7 This amount is made up of the $321,859 of
adjusted basis conceded by respondent, plus these three
additional items that petitioner contends created basis in Marc:
(1) $204,222 of the $800,000 proceeds from the 1997 Bank loan;
(2) $49,000 attributable to petitioner’s purported loan to Silver
Glen that was “reallocated” to Marc in 1997; and (3) $70,454 of
legal expenses that petitioner claims he paid on behalf of Marc
during 1997. We consider these three items in turn. The burden
of proof is on petitioner. Rule 142(a).8
6(...continued)
by Marc during 1997.
7 Petitioner thereby effectively concedes that he is not
entitled to $147,217 of the $792,752 loss he claimed on his 1997
tax return.
8 Effective for court proceedings arising in connection with
examinations commencing after July 22, 1998, if certain
requirements are met, sec. 7491(a) places the burden of proof on
the Commissioner with respect to any factual issue relevant to
ascertaining a taxpayer’s liability for any tax imposed by
subtitle A or B of the Code. Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, sec. 3001,
112 Stat. 726. Petitioner has neither alleged that sec. 7491(a)
applies nor established that the preconditions to its
applicability have been met. Accordingly, sec. 7491(a) does not
apply.
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