- 36 -- 36 - reliability of petitioner's testimony. It was not only self- serving, but it also was at times inconsistent with other evi- dence in the record. As for the stipulations about petitioners' payments to, or on behalf of, K & H, we do not believe those stipulations necessarily support, let alone conclusively prove, petitioners' contention that during the years at issue they were holding K & H's funds for K & H's purposes.25 Indeed, the record (1) shows that petitioner was not even authorized to deposit K & H's construction loan proceeds into petitioners’ accounts during those years and (2) is silent as to (a) whether petitioner was authorized to deposit K & H's checking account and credit line funds into petitioners' accounts;26 (b) whether or how such funds were disbursed during each of the years at issue; and (c) whether petitioners were authorized to retain any portion of such funds 24(...continued) about the nature of any such transactions. 25 Under petitioners' contention, funds otherwise includible in a taxpayer's income under the principles of James v. United States, supra, would never be so included as long as such funds are ultimately repaid. That is because, according to petition- ers, repayment shows that the taxpayer was holding the funds for the purposes of the person from whom they were obtained. 26 We find it hard to believe that petitioner would have been authorized to deposit into petitioners' accounts funds from K & H's checking account and credit line or to retain any portion of those funds for petitioners' own use when he was not authorized to deposit K & H's construction loan proceeds into their accounts or to retain any portion of those deposits for their own use.Page: Previous 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Next
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