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basis in the partnership interest reflects, inter alia, the
adjusted basis in any property the partner has contributed to the
partnership. Secs. 705(a), 722. Section 6001 requires taxpayers
to maintain adequate records from which their correct tax
liability may be determined. Petzoldt v. Commissioner, 92 T.C.
661, 686 (1989).
The only documentation petitioner provided to substantiate
his basis in KCP was the handwritten statement, a typed statement
which contradicted the handwritten statement, and his and his
mother’s bank statements. The handwritten statement indicated
his adjusted basis in KCP in 2001 was $221,194. On brief,
petitioner argued that even though the handwritten statement was
accurate, his 2001 adjusted basis in KCP was actually $184,486,
comprising $70,000 of recourse liabilities, $19,628 of 2001 cash
contributions, and a $81,806 capital account.
Although respondent repeatedly requested documentation and
the Court ordered petitioner to comply with respondent’s
requests, petitioner did not provide any documentation or
testimony substantiating the $70,000 of recourse liabilities.
This Court finds petitioner failed to prove he had recourse
liabilities of $70,000.
In an attempt to substantiate the 2001 cash contributions to
KCP of $19,628, petitioner produced copies of his mother’s 2001
Auto Workers Credit Union account statements, which listed him as
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Last modified: November 10, 2007