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serving than their testimony that McDonald was to receive no more
than $6,000. Based on the evidence, including the flow of funds
between petitioners and petitioners’ family members, we hold that
the 37 percent to 63 percent ratio determined in the statutory
notices is the best approximation of petitioners’ partnership
arrangement to share profits and losses.
Payments From Gold to Petitioners--Respondent determined
that the 1989 payments by check, totaling $8,774 for McDonald and
$23,671 for Maynard, from Gold were income to petitioners and
should have been reported. Gold also paid for insurance for
petitioners and some of their family members, for which
respondent did not make a determination or adjustment to
petitioners’ 1989 income.
Petitioners contend that a part of the amounts paid by Gold
represented a $250 monthly automobile allowance and that the
remainder, whether received and cashed by McDonald or Maynard,
was Maynard’s funds. In that regard, Maynard testified that all
of these check payments from Gold, both for automobile and
otherwise, are either income or expense reimbursement to him,
with the exception of the $250 per month automobile allowance
from Gold to McDonald.
With respect to McDonald’s automobile expenses, McDonald did
not submit any records or documentation to Gold contemporaneously
with the monthly payments during 1989. For purposes of trial,
McDonald submitted documentation reflecting over $3,000 for
automobile expenses, including gasoline charge receipts, repair
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