- 20 -- 20 -
On the record before us, we further find that the foregoing
amounts of unreported income remaining in dispute for 1989 and
1990 consist of the following items and amounts:12
1989 1990
Amounts of deposits in the notice
that remain in dispute
(1) Deposits of (a) K & H's
construction loan proceeds,
checking account funds, and
credit line funds and (b) Ms.
Velilla's construction loan
proceeds and checking account
funds . . . . . . . . . . . . $90,666.35 $60,168.06
(2) Miscellaneous deposits . . . . 83,364.00 41,583.71
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
Preliminary Matters
Respondent used the bank deposits method to reconstruct
petitioners' income for the years at issue. "A bank deposit is
prima facie evidence of income and respondent need not prove a
likely source of that income." Tokarski v. Commissioner, 87 T.C.
12 A review of the parties' briefs leads us to conclude that,
despite certain errors that we found in the stipulations and
briefs, the parties nonetheless agree that the two broad catego-
ries of deposits that remain in dispute are the two identified
below by the Court and that there also is a dispute regarding
whether the $19,310.20 of Kabeiseman loan proceeds that was not
repaid as of the end of 1990 constitutes income to petitioners
for that year.
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