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burden of timely pleading and proving an increase in basis was on
petitioners here, and they did not do so in a timely manner.
Thus, the starting point for calculation of the Roses’ basis will
be the notice of deficiency, and the only adjustments to that
amount will be for items conceded by respondent or determined
within the scope of our jurisdiction in these cases.
Issue #7--The Roses’ Basis in Their SLPC Interest
Petitioners contend that the Roses’ basis in their SLPC
interest should be increased as a result of the $350,000
transaction that occurred between SLPC, TPC, and Rose during 1994
and the $800,000 transaction that occurred between SLPC, TPC, and
Rose during 1995. In support of this contention, petitioners
argue that respondent has conceded the bona fides of the
transactions between SLPC, TPC, and Rose during 1994 and 1995
through the following stipulation:
At December 31, 1994, Mr. Rose paid $350,000 of
the amount which St. Louis owed Tampa Pipeline
Corporation by reducing the amount which Tampa Pipeline
Corporation owed him.
The transaction was recorded on Tampa Pipeline
Corporation’s books by a journal entry reducing the
amount which it owed Rose by $350,000 and reducing the
amount which St. Louis Pipeline owed it by $350,000.
The transaction was recorded in the audited financial
statements and tax returns for 1994.
The transaction was reflected on the books of
St. Louis Pipeline by a journal entry reflecting a
$350,000 reduction it owed Tampa Pipeline Company and
an increase of $350,000 in the amount it owed Rose.
During 1995, Rose paid an additional $800,000 of
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