Henry Deletis, Jr. - Page 11

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          Stables' horses ($39,304) and used this as the Stables' gross               
          income.  Petitioner agrees that the Stables had gross receipts of           
          that amount in 1967.  Metz estimated the Stables' expenses to               
          total $23,281.16.  These estimated expenses included sundries               
          ($335.30), jockey fees ($2,483), insurance ($1,881.96), workmen's           
          compensation ($174), fees for two trainers (P. J. Johnson, $1,313           
          and Mario Padoranni, $7,473.90), and loss on the sale of horses             
          ($9,620).  No  fees were included for trainer Oliver Cutshaw.               
          The sources for most of these estimates are unknown; no                     
          documentation of the expenses was presented at trial.  Metz                 
          determined the names of the officers of the Stables from the bank           
          account and insurance records.  Not knowing who was in control of           
          the Stables, Metz attributed the Stables' corporate income to               
          both petitioner and Singer as dividend income.                              
               There is no evidence of any payments by the Stables to, or             
          on behalf of, petitioner.                                                   
               For the taxable year 1967, respondent determined that                  
          petitioner had failed to report wage income of $12,324.95,                  
          dividend income from the Stables of $15,922.84 ($16,022.84 net              
          income of Stables - $100 dividend exclusion), interest income of            
          $3.15, and net income from the sale of stolen cars of                       
          $148,528.66,5 resulting in a deficiency in tax of $108,045.72.              

          5  The net income figure represents:                                        
                         Income from car sales    $89,200.00                          
                         Income from car sales    59,830.00                           

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