Tom Gonzales v. United States

MEMORANDUM

Tom Gonzales, Sr. (“Appellant”), in his capacity as the personal representative of the estate of his son, Thomas J. Gonzales, II (“Gonzales”), appeals the district court’s grant of summary judgment to the Government on his complaint for a refund of federal income taxes. We have jurisdiction under 28 U.S.C. § 1291 , and we affirm.

1. Appellant failed to raise a genuine dispute of material fact as to whether Gonzales entered into the Presidio transaction “primarily for profit.” See Landreth v. Commissioner, 859 F.2d 643, 648 (9th Cir.1988). Two witnesses with firsthand knowledge of Gonzales’s involvement in the transaction — Gonzales’s accountant, Steve Smith, and his stockbroker, Robert Gallo — testified that Gonzales made the investment primarily to reduce his tax liability by generating a capital loss. Appellant’s evidence that the transaction could theoretically have yielded a profit, including Bruce Lemons’s opinion letter stating that the transaction was a legitimate investment, did not contravene the Government’s evidence of primary motive.

2. Appellant’s second refund claim, stemming from an $8.6 million net operating loss that Gonzales claimed on his 2001 tax…