Michael Friedman and Madeline Friedman - Page 1

                                 T.C. Memo. 1998-196                                  


                               UNITED STATES TAX COURT                                


               MICHAEL FRIEDMAN AND MADELINE FRIEDMAN, Petitioners v.                 
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      
               EDWARD ROSENTHAL AND DEBORAH ROSENTHAL, Petitioners v.                 
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket Nos. 18735-96, 18736-96.          Filed May 27, 1998.           


               J. Timothy Bender and Joseph P. Alexander, for petitioners.            
               Nancy B. Herbert and John E. Budde, for respondent.                    


                       MEMORANDUM FINDINGS OF FACT AND OPINION                        

               HAMBLEN, Judge:  Respondent determined deficiencies in                 
          petitioners Michael and Madeline Friedman's 1989 and 1990 Federal           
          income tax in the amounts of $686,400 and $793,860, respectively.           
          Respondent also determined deficiencies in petitioners Edward and           





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