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presentation of different evidence.’” Id. at 191 (quoting Wayne
Bolt & Nut Co. v. Commissioner, 93 T.C. 500, 507 (1989)).
Thus, we conclude that respondent has raised a new matter.
Respondent went beyond the scope of the original deficiency
determination by arguing in his posttrial brief that the
discharge of the Household Finance mortgage gave rise to COD
income. The deficiency determined in the notice of deficiency
was based on COD income from the discharge of three other
mortgages. Different evidence is required to show that the
Household Finance mortgage generated COD income, because the date
of its cancellation, and thus the date for determining
petitioners’ solvency for purposes of section 108(a)(1)(B) and
(d)(3), differs from the date on which any of the other three
mortgages was canceled. Therefore, respondent bears the burden
of proof and must show, by a preponderance of the evidence, that
petitioners were solvent under section 108(a)(1)(B) as of the
calculation date. For the reasons discussed below, we conclude
that respondent has failed to meet his burden of proof.
C. Respondent’s Failure To Meet His Burden of Proof
In order to establish petitioners’ solvency as of the
calculation date, respondent must prove by a preponderance of the
evidence that the fair market value of petitioners’ assets then
exceeded their liabilities. See Merkel v. Commissioner, 109 T.C.
483, 484 (1997). To exclude from that calculation any portion of
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