Steven Bruce Huntley - Page 6

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          file and pay is due to reasonable cause and not willful neglect.            
          Higbee v. Commissioner, supra at 447.  For reasons discussed                
          herein, we hold that respondent has met his burden of production            
          with respect to the section 6651(a)(1) addition to tax.                     
          Characterization of Purported Losses                                        
               Petitioner argues that he is entitled to itemized deductions           
          for a loss sustained as a result of embezzlement of a brokerage             
          account he held with Kristian Capital Management and a loss                 
          stemming from the termination of his employment at Wyeth-Aryst              
          Pharmaceutical.                                                             
          Kristian Capital Management Brokerage Account                               
               Section 165(g)(1) provides that a loss resulting from a                
          capital asset that becomes worthless during the taxable year                
          shall be treated as a loss from the sale or exchange of that                
          asset as of the last day of the taxable year.  Petitioner claimed           
          that he sustained such a loss from the “embezzlement” of a                  
          brokerage account he held with Kristian Capital Management.                 
               To substantiate his claim, petitioner offered three                    
          documents into evidence:  A partial copy of a letter sent to him            
          from First American Discount Corporation, and two copies of Web             
          pages.  The first letter showed that petitioner held a brokerage            
          account with Kristian Capital Management through the First                  
          American Discount Corporation.  The second document, a copy of a            







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