Zervigon v. Commissioner

ALDO ZERVIGON & ROSALINA ZERVIGON, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Zervigon v. Commissioner Docket No. 1394-74. United States Tax Court T.C. Memo 1975-99; 1975 Tax Ct. Memo LEXIS 274; 34 T.C.M. (CCH) 486; T.C.M. (RIA) 750099; April 9, 1975, Filed *274 Aldo Zervigon, pro se. David M. Berman, for the respondent. RAUM MEMORANDUM OPINION RAUM, Judge: The Commissioner determined a $1,178 deficiency in petitioners' 1972 income tax. At issue is whether they are entitled to carry forward losses which they incurred in 1960 and 1963 by reason of confiscations by the Cuban government in those years. Substantially all of the relevant facts have been stipulated. A small amount of oral testimony was presented that did not add materially to the stipulated facts. Petitioners, husband and wife, filed a joint return for 1972. They were residents and citizens of Cuba until December 22, 1970, when they came to the United States and became resident aliens in this country. Petitioner Aldo Zervigon had owned sugar plantations and land in which his adjusted basis was $50,000. These properties were confiscated by the Cuban government on October 3, 1963, pursuant to the Second Agrarian Reform Act. Also, while still residents of Cuba, petitioners owned rental property with an adjusted basis of $25,000 which the Cuban government confiscated on October 14, 1960, pursuant to the Urban Reform Act. They seek the benefit of carryover deductions*275 in respect of these losses against their 1972 income. We have no alternative but to decide this case against petitioners. An indispensible condition for the claimed deductions is that they be residents of the United States at the time of the confiscations, Bosch v. Commissioner,448 F. 2d 1026 (C.A. 5); Cayetano R. Ribas,54 T.C. 1347, 1349, a condition which was not satisfied here. And secondly, the 1960 and 1963 losses here involved cannot be carried forward to the year 1972, because the stipulated facts show that petitioners did not file the election required by section 172(b)(3)(C)(iii), I.R.C. 1954. Decision will be entered for the respondent.