Court Opinion

ID: 2817844
Source: CourtListenerOpinion
Date Created: 2015-07-16 20:05:27.135695+00
Date Added: 2024-06-11T12:28:29.653483
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                              JUL 16 2015

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

UNITED STATES OF AMERICA,                        No. 13-35829

              Plaintiff - Appellee,              D.C. No. 3:11-cv-06113-PK

 v.
                                                 MEMORANDUM*
DEAN M. YOUNGQUIST,

              Defendant - Appellant.

                   Appeal from the United States District Court
                            for the District of Oregon
                    Anna J. Brown, District Judge, Presiding

                             Submitted July 6, 2015**
                                Portland, Oregon

Before: PREGERSON, N.R. SMITH, and OWENS, Circuit Judges.

      Defendant-Appellant Dean M. Youngquist appeals the district court’s order

granting summary judgment in favor of the United States. We have jurisdiction

pursuant to 28 U.S.C. § 1291, and we affirm.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      Summary judgment in favor of the United States was properly granted.

Although Youngquist alleges that he incurred a loss of $5,677.34 on his ProTrade

stock transactions in 1996, he does not dispute that ProTrade accurately reported

that he sold $1,451,076 worth of stock that year. Thus, the only question is

whether the cost of acquiring the stock exceeded the sales proceeds such that the

sales generated no taxable gain.

      Youngquist has the burden to prove the cost basis in his ProTrade stock

sales. See Moore v. Comm’r, 425 F.2d 713, 715 (9th Cir. 1970) (“Under 26 U.S.C.

§ 1012, the taxpayer bears the burden of establishing the cost basis of property.”).

However, Youngquist failed to produce any records from ProTrade or any

contemporaneous records of his own establishing the cost of each stock he

purchased through ProTrade.1

      Youngquist’s non-specific testimony and ambiguous bank account records

from Washington Federal Savings showing a $73,000 withdrawal on November 5,

1996, and a $67,322 deposit on December 20, 1996, do not establish that he

incurred an aggregate loss of $5,677.34 in trading within his ProTrade account.

      1
        It is the taxpayer’s responsibility to retain records as long as their contents
“may become material in the administration of any internal review law.” Treas.
Reg. § 1.6001-1(e). Because Youngquist never filed a 1996 tax return, the IRS
could have brought an action “at any time.” I.R.C. § 6501(c)(3).

                                           2
Youngquist’s testimony and Washington Federal Savings bank account records are

not sufficient to demonstrate that the $73,000 withdrawal went to his ProTrade

account or that the $67,322 deposit came from his ProTrade account. But even if

we take it as true that Youngquist deposited $73,000 into his ProTrade account on

November 5, 1996, and withdrew $67,322 from his ProTrade account on

December 20, 1996, there is still insufficient evidence that the $67,322 deposit

represented the closing balance of the ProTrade account or that Youngquist had not

made any previous withdrawals from that account. Youngquist’s testimony and

bank account records were therefore “insufficient to establish that the [cost] basis

was other than zero.” Coloman v. Comm’r, 540 F.2d 427, 431 (9th Cir. 1976).

      AFFIRMED.

                                          3