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Respondent’s determination is presumed to be correct, and
petitioner bears the burden of proof.3 See Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933).
B. Whether Petitioner’s Capital Gain From the Sale of Stock in
1998 Was $408,092.98
Respondent determined that petitioner had capital gain of
$1,100,526 from the sale of stock in 1998, but now contends that
he had capital gain of $408,092.98. Respondent concedes that
petitioner had capital losses of $77,358.42 in 1998 and that he
had substantial bases in his IBM and Merck stock, instead of zero
as determined in the notice of deficiency. Petitioner did not
establish his basis in the first 10 shares of IBM stock he sold
in 1998 or in the 159 shares of IBM stock transferred to his
Schwab account on April 17, 1998. Similarly, petitioner did not
prove his basis in the 1,276.4571 shares of Merck stock held in
his Schwab account on August 1, 1997, or in the 1,800 shares of
Merck stock transferred to his Schwab account on April 9, 1998.
Petitioner does not dispute respondent’s calculation of gain on
his sales of IBM and Merck stock. Thus, we hold that petitioner
had capital gain of $408,092.98 in 1998.
3 Petitioner bears the burden of proof on the basis, capital
loss carryforward, charitable contributions, and filing status
issues. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933). The burden of proof for a factual issue may shift to the
Commissioner under certain circumstances. Sec. 7491(a).
Petitioner does not contend that sec. 7491(a) applies in this
case.
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