- 47 -- 47 -
to establish that the foregoing two miscellaneous deposits at
issue are not taxable.
Based on our review of the entire record before us, we find
that petitioners have failed to establish that they do not have
unreported income resulting from the miscellaneous deposits at
issue for the years 1989 and 1990 in the amounts of $83,364 and
$41,583.71, respectively.33
Deposits of Funds that Mr. Kabeiseman
Transferred to Petitioner
The parties agree that (1) on January 18, 1989, and on
February 7, 1989, petitioner deposited into one of petitioners'
accounts loans obtained from Mr. Kabeiseman in the amounts of
$25,000 and $4,000, respectively; and (2) during 1990, petitioner
made payments totaling $9,689.80 to Mr. Kabeiseman with respect
to those loans. In addition, the parties do not dispute that
petitioner did not make any other payments with respect to those
loans to Mr. Kabeiseman. The only dispute is whether Mr.
Kabeiseman discharged the respective outstanding balances of
those loans during 1990.
Section 61(a)(12) provides that gross income generally
includes income from the discharge of indebtedness. A debt is
discharged at the point in time at which an identifiable event
occurs that makes it clear that the debt will never be paid.
33 We have considered all of petitioners' other arguments with
respect to the miscellaneous deposits at issue and find them to
be without merit.
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