Bill McDonald - Page 25

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               1989 Date      Amount         Location Purchased                       
               Apr. 20        $3,000         Commerce Savings                         
               June 8         9,000          Commerce Savings                         
               June 8         10,000         Bank of Alex Brown1                      
               June 12        9,000          Wells Fargo                              
               June 14        1,432          Wells Fargo                              
               June 14        2,594          Wells Fargo                              
               1 Respondent conceded that the $10,000 cashier’s check was             
          from a source that was not taxable to McDonald.                             
          Respondent determined that these amounts, along with $1,000 cash            
          deposited by McDonald in the M&M trust account, constitute income           
          to McDonald because the source of the cash was untaxed income               
          from clients that had not been deposited into the bank or                   
          otherwise reported as income for financial or tax purposes.                 
               With respect to the $2,500 item from McDonald’s daughter to            
          Maynard, petitioners argue that Maynard first gave the $2,500 to            
          McDonald’s daughter, who, in turn, gave it to McDonald to                   
          purchase the $2,594 cashier’s check that went to purchase the               
          home placed in McDonald’s wife’s name.  Ultimately, petitioners             
          would have us believe that this circuitous route for the $2,500             
          was concluded when McDonald’s daughter repaid Maynard.  Other               
          than the $2,500 item, petitioners make no particular argument               
          with respect to the cash items that respondent determined were              
          income to Maynard.  With respect to McDonald, it is contended               
          that he had available to him from both taxable and nontaxable               
          sources almost $21,000 with which to purchase the cashier’s                 
          checks remaining in controversy.  Ostensibly, the $21,000                   
          represents all of McDonald’s sources from which he was able to              
          make applications, which would include, in addition to purchasing           

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Last modified: May 25, 2011