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28, 1989, petitioner contracted to buy a house and 9.3 acres of
land on Cave Road, in Campbellsville, for $53,500. He made a
cash deposit of $500 upon execution of the contract. After
negotiation and applications, he received, on October 18, 1989, a
commitment from First Federal Savings Bank to grant a HUD-insured
residential mortgage. The closing took place on November 6,
1989. In connection with petitioner's purchase of the house,
Jean gave him $5,000. No other sizable cash assets belonging to
petitioner were listed on any of the documents relating to his
acquisition of the house.
Petitioner and Sandra were married on June 1, 1990, and
honeymooned in Tahiti.
D. Petitioner's Cash Expenditures in 1989 and 1990
On February 1, 1989, petitioner purchased a 1989 Ford
Mustang convertible for approximately $20,500, less a deposit of
$500 and trade-in allowance, with the balance of approximately
$17,100 financed by Liberty National Bank over 6 years at a
14.95-percent annual rate. In October 1989, petitioner paid in
full, with cash, the outstanding loan of $16,132 on the Mustang.
Petitioner and Sandra purchased a 1989 Chevrolet Corvette in
October 1990. The purchase price of the Corvette was $27,995.
Petitioner made a deposit of $200 on October 3, 1990. On October
5, 1990, petitioner paid the balance due for the Corvette and a
service contract, after receiving a trade-in allowance, with cash
in the amount of $18,003, which he had carried to the dealership
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