William B. and Donna McDermott - Page 7

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          home over the Christmas holiday and to buy Christmas presents for           
          them and members of the extended family.  They assert that the              
          $2,500 was wired to them from Ms. McDermott’s mother to apply               
          towards their daughter’s college tuition for the fall semester.             
          They assert that the $831 deposit came from a nontaxable source.            
               We need not decide which party bears the burden of proof in            
          this case in that we can and do decide this case on the basis of            
          the record.4  Petitioners generally support their assertions as             
          to the tax status of the deposits by their respective testimony             
          and the introduction of certain documentary evidence.  On the               
          basis of the record at hand, we are persuaded that none of the              
          six deposits are includable in petitioners’ 1995 gross income.              
          We have considered all of the parties’ arguments and reject those           
          arguments not discussed herein as meritless.                                

                                                  Decision will be entered            
                                             under Rule 155.                          









               4 Sec. 7491 does not apply to this case because the                    
          examination of petitioners’ tax return commenced before July 22,            
          1998, the effective date of that section.  Internal Revenue                 
          Service Restructuring and Reform Act of 1998, Pub. L. 105-206,              
          sec. 3001(a), 112 Stat. 726.                                                





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