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During some portion of the years in issue, Mrs. Gandy
maintained a bank account at the First National Bank of Canton
styled "Gandy Travel Agency" (account No. 00-1471-2). The
business expenses of Gandy Travel Agency (the travel agency) were
paid from this account. Of the $8,300 in loans that Mrs. Gandy
borrowed in the name of the travel agency in 1987, $7,600 was
deposited into this account and $700 into account No. 12-6133-8.
During the years in issue, Burnice Gandy maintained a
personal bank account at the First State Bank of Van styled
"Burnice Gandy" (account No. 10-1106-3) (the Burnice Gandy
account). With very few exceptions, the deposits during 1985 and
1986 consisted of Burnice Gandy's Social Security and veterans'
benefits and interest. However, on January 28, 1985, a check
payable to the nursery in the amount of $9,831.50 was deposited
into the Burnice Gandy account; on the back of the check appeared
the handwritten endorsement "Gandy's Nursery". The total deposit
to the Burnice Gandy account on that date was $10,000. Also on
January 28, 1985, a check in the amount of $10,000 was written
from the Burnice Gandy account to Mr. Gandy. On November 24,
1985, a check in the amount of $10,000 was written from the
Burnice Gandy account to Mr. Gandy.
On March 23, 1987, petitioners deposited into the Burnice
Gandy account $5,000 out of a check for $13,437.32 payable to the
nursery. On July 1, 1987, a check for $10,000 payable to Burnice
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