- 5 -
Petitioners failed to provide respondent with adequate books
and records. Respondent, therefore, reconstructed petitioners'
1988 and 1989 gross income using the bank deposits method of
proof. The following is a summary of respondent's analysis:
Deposits to Northeast
Savings Bank accounts: 1988 1989
1. #1395781 -- $6,245.22
2. #21 02 040311681 -- 740.00
3. #21 02 040194580 $19,350.52 107,302.59
4. #21 02 140784006 109,587.38 3,087.44
5. #21 00 144789746 10,481.00 5,647.00
Total 139,418.90 123,022.25
Less:
1. Transfers 5,358.71 40,588.32
2. Funds available for
deposit
Wages less withholding 59,797.42 46,909.88
IRA distributions 7,500.00 25,232.00
Social Security 5,409.00 5,627.00
Total 78,065.13 118,357.20
Unexplained bank deposits: 61,353.77 4,665.05
The $350,000 loss revolves around a real estate transaction
of petitioners' son, Ara. On May 3, 1988, Ara established the
King Realty Trust. Immediately afterward, the trust acquired
several properties on King Street and Oread Place in Worcester,
Massachusetts (the King Trust Properties). The trust then, in
early May, encumbered the properties by mortgages with three
lenders. The total amount of the encumbrances was $1,750,000.
Later that same year, on November 14, 1988, one of the
lenders, Petron Mortgage Company Limited Partnership (Petron)
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011