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that respondent's computation of the assets and depreciation
transferred to JKY was in error.
Finally, petitioners argue that JKY assumed certain payroll
taxes that should reduce petitioners' capital account balance for
each of the years in issue. Caufield testified that JKY assumed
various payroll tax liabilities as part of the section 351
transfer. These payroll taxes were included on Caufield's "S
Corporation 351 Transfer". Respondent determined that JKY did
not assume these liabilities. By Caufield's own admission at
trial, the "S Corporation 351 Transfer" represented his initial
computation. Petitioners have not provided any evidence, through
Yoon's testimony or canceled checks, of JKY's assumption or
payment of these payroll tax liabilities. Respondent's
determination that JKY did not assume various payroll tax
liabilities will be sustained.
3. Personal Living Expenses
Petitioners argue that their personal living expenses for
1989 were less than those calculated by respondent. Petitioners
claim that certain expenditures, mainly life insurance payments
and income tax payments, were incurred in 1990 and not in 1989.
This, petitioners claim, would make a difference because
respondent used a discounted 1990 figure to determine
petitioners' 1989 personal living expenses. If only the
recurring items of expense were included for both years before
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