Joao Montoro and Neuza Paula - Page 19

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          to them.  DiLeo v. Commissioner, 96 T.C. 858, 869 (1991), affd.             
          on other grounds 959 F.2d 16 (2d Cir. 1992); Parks v.                       
          Commissioner, supra at 658.                                                 
               2.   Whether Petitioner-Husband's Testimony Was Generally              
                    Credible                                                          
               Petitioners contend that they had the money for the bank               
          deposits in Brazil before 1990 and brought it to the United                 
          States in 1990 and 1991.  Respondent contends that petitioner-              
          husband's testimony regarding their Brazilian funds is self-                
          serving and lacks credibility.                                              
               We decide whether a witness is credible based on objective             
          facts, the reasonableness of the testimony, the consistency of              
          statements made by the witness, and the demeanor of the witness.            
          Quock Ting v. United States, 140 U.S. 417, 420-421 (1891); Wood             
          v. Commissioner, 338 F.2d 602, 605 (9th Cir. 1964), affg. 41 T.C.           
          593 (1964); Pinder v. United States, 330 F.2d 119, 124-125 (5th             
          Cir. 1964); Concord Consumers Housing Coop. v. Commissioner, 89             
          T.C. 105, 124 n.21 (1987).  We may discount testimony which we              
          find to be unworthy of belief, but we may not arbitrarily                   
          disregard testimony that is competent, relevant, and                        
          uncontradicted, Conti v. Commissioner, 39 F.3d 658, 664 (6th Cir.           
          1994), affg. 99 T.C. 370 (1992), and T.C. Memo. 1992-616;                   
          Demkowicz v. Commissioner, 551 F.2d 929, 931-932 (3d Cir. 1977),            
          revg. T.C. Memo. 1975-278; Banks v. Commissioner, 322 F.2d 530,             
          537 (8th Cir. 1963), affg. in part and remanding in part T.C.               
          Memo. 1961-237; Loesch & Green Constr. Co. v. Commissioner, 211             



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