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did not know and could not accurately reconstruct his income for
the years in issue.
a. 1987
In 1987, petitioner husband owned and was president of
Americana, a Michigan corporation that used investments to buy
certificates of deposit (CD's) and then borrow against them. He
used the loan proceeds to buy, sell, and manage residential real
estate for investors. Many of Americana's investors were friends
and relatives of petitioner husband's family. Americana promised
its investors a high rate (i.e., 17 percent) of return. It
reported gross sales of homes of $140,718.05 and a $31,149.26
loss for 1987. Americana went out of business in 1987.
In 1987, petitioner husband was a real estate broker and
operated rental properties for B.R. Tabbi, Inc., d.b.a. Earl Kiem
Realty Bell/Shores Realty, Inc., a Michigan corporation; BRT
Mortgage Co. (BRT); and Canta Building Co. (Canta). Petitioner
husband was president of Earl Kiem Realty. He sold $116,595 of
real property in 1987.
b. 1988
Petitioner husband was a real estate broker and operated
rental properties for Canta in 1988. He sold $27,847 of real
property in 1988.
c. 1989
Petitioner husband was a real estate broker and operated
rental properties in 1989 for Canta, Premiere Financial Services
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