TAX COURT OPINION

Case: Juan Carlos Wandemberg Boschetti
Docket Number: 11045-24S
Judge: Leyden
Opinion Type: bench
Filed: 07/09/2025
Pages: 13

United States Tax Court Washington, DC 20217 JUAN CARLOS WANDEMBERG BOSCHETTI, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 11045-24S ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Special Trial Judge Diana L. Leyden at the Standalone Remote Trial Session, on May 7, 2025, containing her oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, an appropriate decision will be entered for respondent with respect to the deficiency and for petitioner with respect to the accuracy-related penalty for section 6662(a). (Signed) Diana L. Leyden Special Trial Judge Served 07/09/25 RECEIVED 6/6/25 IN THE UNITED STATES TAX COURT In the Matter of: JUAN CARLOS WANDEMBERG BOSCHETTI, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. Docket No. 11045-24S ) ) ) ) ) ) ) ) ) ) ) ) Pages: 1 through 11 Place: Washington, DC Date: May 7, 2025 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 IN THE UNITED STATES TAX COURT In the Matter of: JUAN CARLOS WANDEMBERG BOSCHETTI, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. Docket No. 11045-24S ) ) ) ) ) ) ) ) ) ) ) ) United States Tax Court 400 Second Street, NW Room 400 Washington, District Of Columbia 20217 May 7, 2025 The above-entitled matter came on for bench opinion, pursuant to notice at 1:57 p.m. HONORABLE DIANA L. LEYDEN Special Trial Judge BEFORE: APPEARANCES: For the Petitioner: No Appearance For the Respondent: No Appearance 2 P R O C E E D I N G S (1:57 p.m.) THE CLERK: Calling docket 11045-24S, Juan Carlos Wandemberg Boschetti. (Whereupon, a bench opinion was rendered.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 3 Bench Opinion by Judge Diana L. Leyden May 7, 2025 Juan Carlos Wandemberg Boschetti v. Commissioner of Internal Revenue Docket No. 11045-24S THE COURT: The Court has decided to render oral findings of fact and opinion in this case and the following represents the Court's oral findings of fact and opinion. The oral findings of fact and opinion shall not be relied upon as precedent in any other case. The oral findings of fact and opinion are made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code and Tax Court Rule 152. Rule references in this opinion are to the Tax Court Rules of Practice and Procedure, and section references are to the Internal Revenue Code, in effect at all relevant times. This proceeding was heard as a Small Tax Case pursuant to the provisions of section 7463 and Rules 170 through 174. The Court uses the term "Internal Revenue Service" or "IRS" to refer to administrative actions taken outside these proceedings. The Court uses the term "respondent" to refer to the Commissioner of Internal Revenue, who is the head of the IRS and is respondent in this case, and to refer to the actions taken in connection 25 with this case. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 The trial of this case was conducted on May 5, 4 2025, at the Court's Standalone Remote Trial Session. Petitioner appeared on his behalf. Erica Zeiler appeared on behalf of respondent. Respondent has conceded the accuracy-related penalty under section 6662(a), and Petitioner has conceded that he received wages totaling $85,858 and did not report them on his 2021 federal income tax return. Petitioner claimed an $800 recovery rebate credit on his 2021 tax return. For 2021, the IRS issued a recovery rebate credit to petitioner of $1,400. Any challenges to the amount of the recovery rebate credit that the IRS allowed petitioner for 2021 the Court concludes are waived as petitioner did not address that issue during the trial. Likewise, petitioner seems to have asserted that he was entitled to claim a dependency exemption for his mother, but he did not address that issue during the trial and the Court concludes that petitioner waived this issue. The only issue remaining for decision is whether petitioner was entitled to deduct capital losses from the sales of securities during 2021 in the amount of petitioner's unreported wages. Respondent asserts that capital losses in excess of $3,000 as to 18 sales of securities listed on the Notice of Deficiency are not allowed and that wash sale losses incurred during 2021 are 1 2 3 4 5 6 7 8 9 10 11 not deductible. On the evidence before the Court and 5 using the burden-of-proof principles below, the Court holds that petitioner may not deduct more than $3,000 of the listed capital losses for 2021 and may not deduct any other the losses from wash sales in 2021. Background Respondent's Proposed Trial Exhibits 1000-R though 1008-R and petitioner's Proposed Trial Exhibit 1-P were admitted into the record without objection at trial and are incorporated herein by this reference. Petitioner lived in New Mexico at the time he filed his Petition in 12 this case. 13 14 15 16 17 18 19 20 21 22 23 24 25 Petitioner showed zero taxable income on his 2021 Form 1040, U.S. Individual Income Tax Return. He now concedes that he should have reported wage income totaling $85,858 on his 2021 return. The IRS examined petitioner's return through its Automated Underreporter System and in a Notice of Deficiency dated July 1, 2024, determined that petitioner had capital losses of $50,391 from the sale of 18 securities, of which $3,000 was allowed as a capital loss deduction, and unreported wage income of $85,858. These adjustments resulted in a deficiency in tax of $11,154 and the IRS imposed an accuracy-related penalty under section 6662(a) of $1,899. As indicated earlier in this opinion 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 respondent has conceded the penalty and petitioner has 6 conceded he earned wage income of $85,858 during 2021. On July 6, 2024, petitioner timely filed a Petition in this case seeking redetermination of the Notice of Deficiency dated July 1, 2024. Discussion I. Burden of Proof In general, the Commissioner's determination set forth in a notice of deficiency is presumed correct, and the taxpayer bears the burden of proving that the determination is in error. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Deductions are a matter of legislative grace, and a taxpayer bears the burden of proving that he or she is entitled to any deduction claimed. See Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). Under section 7491(a), the burden of proof may shift to the Commissioner if the taxpayer produces credible evidence with respect to any relevant factual issue and meets other requirements. Petitioner has not argued or established that section 7491(a) applies, and therefore the burden of proof remains 23 with him. 24 25 II. Capital Loss Deductions Section 165(a) generally permits a deduction for 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 a loss sustained during the taxable year and not 7 compensated for by insurance or otherwise. However, a loss from the sale or exchange of a capital asset, such as a security, is allowed as a deduction only to the extent permitted under sections 1211 and 1212. I.R.C. § 165(f). Subject to the limitations of section 1211(b), taxpayers can carry forward their capital loss to succeeding taxable years. I.R.C. § 1212(b). Pursuant to section 1211(b), noncorporate taxpayers such as petitioner are permitted to deduct a loss on the sale or exchange of a capital asset to the extent of the gain from such a sale or exchange, plus the lesser of (1) $3,000 ($1,500 in the case of a married individual filing separately) or (2) the excess of the loss over the gain. However, section 1091, which addresses losses from wash sales of stock or securities, explains that: In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 option so to acquire, substantially identical 8 stock or securities, then no deduction shall be allowed under section 165 unless the taxpayer is a dealer in stock or securities and the loss is sustained in a transaction made in the ordinary course of such business. For purposes of this section, the term "stock or securities" shall, except as provided in regulations, include contracts or options to acquire or sell stock or securities. Petitioner has not asserted, and the record does not support, that during 2021 he was a dealer in stock or securities. The Notice of Deficiency listed sales of 18 securities that resulted in a loss of $50,391. The IRS treated those sales as sales of capital assets. The year- end statement from TD Ameritrade that was entered into evidence as Exhibit 1001-R shows that for 2021 petitioner also had disallowed wash sales losses of $198,582.01, as well as $1,986.72 in short-term gains and $461.66 in long- term gains from the sales of securities. The parties have not reconciled the sales listed on the Notice of Deficiency with the TD Ameritrade statement. However, the Notice of Deficiency references Forms 1099-B for each of the 18 sales. Therefore, the Court will sustain the allowance of a $3,000 capital loss deduction with respect 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 to the 18 sales listed on the Notice of Deficiency and 9 permitted under section 1211(b). Petitioner argued that the way he understood his transactions during 2021 was that he put into his TD Ameritrade account the wages he failed to report on his tax return and lost the same amount if not more. Certainly, the TD Ameritrade statements show that he had wash sale losses of much more than his wages. The Forms 1099-B referenced in the Notice of Deficiency show a total capital loss from the sale of 18 securities of $50,391, less than the amount of the wages petitioner did not report but concedes he earned in 2021. However, as discussed above, under section 1211 petitioner is only entitled to deduct a capital loss of $3,000 in 2021 and is not allowed to claim wash sale losses as deductions. Petitioner also asserted that limiting his losses to $3,000 was "unconstitutional" and unfair. Petitioner did not explain the basis of his claim that the limitation under section 1211 is unconstitutional and the Court does not find any such reason. The Court has considered all arguments made by the parties, and to the extent not mentioned above, concludes that they are moot, irrelevant, or without 24 merit. 25 To reflect the foregoing, a decision will be entered for respondent with respect to the deficiency and 10 decision will be entered for petitioner with respect to the accuracy-related penalty under section 6662(a). This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 2:07 p.m., the above-entitled matter was concluded.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CERTIFICATE OF TRANSCRIBER AND PROOFREADER 11 CASE NAME: Juan Carlos Wandemberg Boschetti v. Commissioner DOCKET NO.: 11045-24S We, the undersigned, do hereby certify that the foregoing pages, numbers 1 through 11 inclusive, are the true, accurate and complete transcript prepared from the verbal recording made by electronic recording by MetMez Group on May 7, 2025 before the United States Tax Court at its session in Washington, DC, in accordance with the applicable provisions of the current verbatim reporting contract of the Court and have verified the accuracy of the transcript by comparing the typewritten transcript against the verbal recording. _______________________________________________ Susan Patterson, CDLT-174 5/14/25 Transcriber Date _______________________________________________ Traci Fine, CDLT-169 Proofreader 5/19/25 Date