United States Tax Court T.C. Memo. 2023-60 BENJAMIN SOLEIMANI AND SHARYN SOLEIMANI, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent ————— Docket No. 8884-13. Filed May 15, 2023. ————— Carlos F. Ortiz, Mayling C. Blanco, and Matthew D. Lee, for petitioners. Shawna A. Early, Lydia A. Branche, and Marc L. Caine, for respondent. MEMORANDUM FINDINGS OF FACT AND OPINION GALE, Judge: Respondent determined a deficiency in petitioners’ 2007 federal income tax of $414,193 and a section 6662(a) accuracy- related penalty of $82,839. 1 Petitioners resided in New York when they timely filed a Petition seeking a redetermination of the deficiency. The issue for decision is whether petitioners are entitled to long-term capital loss deductions relating to three parcels of real property allegedly confiscated by the Iranian government. 2 1 Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure. Dollar amounts have been rounded to the nearest dollar. 2 The deficiency at issue arises from respondent’s disallowance of a $2,725,000 long-term capital loss deduction from the confiscation claimed on petitioners’ 2007 federal income tax return, and computational adjustments related to that Served 05/15/23 2 [*2] FINDINGS OF FACT The parties filed Stipulations of Facts and accompanying Exhibits, which we incorporate by this reference. Petitioner-Husband’s Experience with Iran Petitioner-husband (petitioner) was born in Iran but left in the early 1960s and immigrated to the United States. He became a permanent resident of the United States in 1964 and began filing U.S. federal income tax returns that year. Petitioner returned to Iran once around 1976. During this visit he was detained for approximately 30 days. This was the last time he had been in Iran as of the time of trial. Following an Islamic revolution in 1978 and 1979, Shah Mohammad Reza Pahlavi (Shah) was ousted from power, and the Islamic Republic of Iran was proclaimed on April 1, 1979. Iranians affiliated with the Shah’s regime were subject to imprisonment, arrest, and execution. Petitioner and his family were considered supporters of the Shah, and petitioner was deemed a deserter at the beginning of the Islamic Revolution. Petitioner maintains that since his trip around 1976 he has been unable to travel to Iran because he fears abduction, imprisonment, or execution were he to return. History of Allegedly Expropriated Properties Petitioner claims that three unimproved parcels of real estate in Tehran, Iran (Iranian properties), were purchased by his uncle on his behalf and registered under his name in 1976, 1977, and 1978, respectively. Petitioner claims that these properties were purchased for 180 million rials ($2,608,695), 3 110 million rials ($1,594,202), 4 and 95 disallowance. Petitioners subsequently filed an amended return on which the claimed long-term capital loss deduction from the confiscation was increased to $5,579,708, entitling them to a refund. …
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