Charles R. Harp and April B. Harp - Page 19

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                              Taking account of the parties' concessions and the errors                                                                                    
                    that we found in certain stipulations and in the briefs, on the                                                                                        
                    record before us, we find that the amounts of petitioners' un-                                                                                         
                    reported income for 1989 and 1990 that remain in dispute are                                                                                           
                    $174,030.35 and $121,061.97, respectively, calculated as follows:                                                                                      
                                                                                          1989            1990                                                             
                    Deposits treated as unreported                                                                                                                         
                    income in the notice  . . . . . . .  $817,214.29    $319,904.41                                                                                        
                    Less concessions by respondent  . .   640,684.049    218,152.6410                                                                                      
                    Less concession by petitioners  . .     2,500.0011       --                                                                                            
                    Deposits in the notice that remain                                                                                                                     
                    in dispute after taking account of                                                                                                                     
                    concessions by the parties  . . . .   174,030.35     101,751.77                                                                                        
                    Amount of the Kabeiseman loan                                                                                                                          
                    proceeds deposited during 1989                                                                                                                         
                    and not repaid as of Dec. 31, 1990,                                                                                                                    
                    that respondent contends is income                                                                                                                     
                    from the discharge of indebtedness         --         19,310.20                                                                                        
                    Amounts of unreported income                                                                                                                           
                    remaining in dispute  . . . . . . .   174,030.35     121,061.97                                                                                        


                    9  Respondent's concessions for 1989 consist of the following                                                                                          
                    deposits into petitioners' accounts during that year:  (1) De-                                                                                         
                    posits of $481,051.62 disbursed from petitioners' accounts as                                                                                          
                    payments to, or on behalf of, K & H, (2) deposits of $29,000 of                                                                                        
                    the Kabeiseman loan proceeds, (3) a deposit of $17,000 of the                                                                                          
                    proceeds of the sale of a promissory note to Mr. Kabeiseman, and                                                                                       
                    (4) other deposits of various items totaling $113,632.42.                                                                                              
                    10  Respondent's concessions for 1990 consist of the following                                                                                         
                    deposits into petitioners' accounts during that year:  (1) De-                                                                                         
                    posits of $56,155.40 disbursed from petitioners' accounts as                                                                                           
                    payments to, or on behalf of, K & H, (2) a deposit of $22,500 of                                                                                       
                    the proceeds of the sale of property known as "Dairy Creek", in                                                                                        
                    which petitioners had a basis of $22,649.60, and (3) other                                                                                             
                    deposits of various items totaling $139,497.24.                                                                                                        
                    11  See supra note 5.                                                                                                                                  




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