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the contract price for each yacht’s construction and capital
improvements that had been substantiated. Petitioner contends
that he in fact made expenditures to account for his claimed
basis, but is unable to substantiate the expenditures because all
of his records were stolen by his estranged spouse. On account
of this purported theft, petitioner, relying on Cohan v.
Commissioner, 39 F.2d 540 (2d Cir. 1930), urges us to accept a
reconstruction of his basis based upon an extrapolation from the
costs he incurred in the construction of certain other yachts in
later years.10
We do not find credible petitioner’s claim that his boat
records were stolen by his former spouse. The former spouse
testified credibly that the only records she took when she left
petitioner were those pertaining to the couple’s personal joint
checking accounts.11 She denied taking records related to his
yachts, yacht charter business, or any other records besides the
joint checking accounts in either 1995 or 1997. Petitioner did
not issue a subpoena to his former spouse in an effort to obtain
10 Petitioner has neither claimed nor shown entitlement to
any shift in the burden of proof pursuant to sec. 7491(a).
Accordingly, petitioner retains the burden of proof with respect
to all issues in this case except respondent’s determinations of
fraud for the years in issue. See Rule 142(a) and (b).
11 The checking account records taken by petitioner’s spouse
are in the record and, as discussed more fully hereinafter, do
not support petitioner’s claim that he made expenditures that
created basis in the amounts he claims.
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