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cashier's checks, petitioners obtained cash necessary to make
cash purchases. Petitioners, however, have submitted no receipts
reflecting the alleged cash purchases. With regard to a claimed
purchase of $260,000 from one Ralph Bassett, a bill of sale
establishes that the purchase was for only $130,000.
Petitioners have failed to meet their burden of proof, and
respondent's determinations of the ending inventory, purchases,
and cost-of-goods sold of L & L Supply are sustained for each
year in issue. Rule 142(a); Welch v. Helvering, supra at 115;
Cheesman v. Commissioner, T.C. Memo. 1994-509.
Claimed $200,810 NOL Re: Sales & Servicing Business
For 7 months in 1985, Daniel operated a business that sold
repair parts for and that made repairs to oil field drilling
equipment.
On a Schedule C attached to petitioners' 1985 joint Federal
income tax return, Daniel claimed a net operating loss of
$200,810 relating to this business. On the Schedule C, Daniel
indicated that the expenses claimed were estimates. At trial,
Daniel testified that the $711,055 cost-of-goods sold claimed
on this 1985 Schedule C was estimated based on seven-twelfths
of total purchases and seven-twelfths of 1984 labor costs for
this business. On this same Schedule C for 1985, however,
Daniel also claimed a separate and additional $156,392 expense
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