Randon J. Scholet - Page 11

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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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