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McDonald and Maynard split partnership profits by a ratio of
approximately 37 to 63 percent.
More in line with the statutory notices, Agent Pease’s
analysis reflected that the 1989 return preparation ratio between
Maynard and McDonald was about 60 percent to 40 percent,
respectively. McDonald, however was responsible for the
administrative duties, including billing, banking, record
keeping, etc. Other than their self-serving testimony,
petitioners have not produced any evidence of a partnership
agreement. In addition, petitioners’ financial transactions,
which included shifting relatively large amounts of cash between
petitioners and their families, combined with petitioners'
indiscriminate use of reported and unreported bank deposits for
personal purposes, and their failure to distinguish between
interests in the partnership and corporate entities, severely
weaken petitioners’ credibility regarding their alleged
partnership arrangements.
Petitioners’ position that Maynard was entitled to the
partnership profits in excess of $6,000 defies belief and is
wholly unsupported by the evidence in the record. On the other
hand, respondent, although determining in the notices of
deficiency a ratio of about 37 percent to 63 percent for McDonald
and Maynard, respectively, argues on brief that the partnership
income should be split 50 percent-50 percent, as reflected on the
Schedules K-1. We do not find the 50 percent-50 percent reported
position of petitioners to be any more persuasive or less self-
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