John S. and Christobel D. Rendall - Page 4

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          compute their long-term capital gain therefrom by using a last-             
          in-first-out (LIFO) method for computing cost basis, as they                
          allege, or by using a first-in-first-out (FIFO) method for                  
          computing cost basis, as respondent alleges (the LIFO/FIFO basis            
          issue); (3) a $2 million nonbusiness bad debt deduction in 1997             
          as the result of the worthlessness in that year of a $2 million             
          debt from Solv-Ex to Mr. Rendall; (4) alternatively, a $2 million           
          business bad debt deduction as a result of that alleged                     
          worthlessness; and (5) a worthless stock loss deduction for the             
          worthlessness, in 1997, of either Mr. Rendall’s remaining common            
          stock in Solv-Ex after the sale of 634,100 shares or (assuming              
          the sale of those shares is held not to be taxable to                       
          petitioners) his common stock interest in Solv-Ex, including                
          those 634,100 shares.                                                       
               Unless otherwise indicated, all section references are to              
          the Internal Revenue Code in effect for the year at issue, 1997,            
          and all Rule references are to the Tax Court Rules of Practice              
          and Procedure.                                                              
                                  FINDINGS OF FACT3                                   
               Some facts are stipulated and are so found.  The stipulation           


               3  To the extent that petitioners or respondent fail to set            
          forth objections to the other’s proposed findings of fact, we               
          conclude that those proposed findings of fact are correct except            
          to the extent that the nonobjecting party’s proposed findings of            
          fact are clearly inconsistent therewith.  See Jonson v.                     
          Commissioner, 118 T.C. 106, 108 n.4 (2002), affd. 353 F.3d 1181             
          (10th Cir. 2003).                                                           




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