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income should be reduced because $6,600 of Kenmore’s annual gross
receipts came from a source that was nontaxable to Kenmore. We
concluded that there was a sufficient likelihood that the
deposits were made, so that respondent had failed to present
clear and convincing evidence that the payments were not
deposited into Kenmore’s Account in the years in which the
purchase-money mortgage payments were made. However, in order
for us to conclude that Gleave’s taxable income should be
reduced, the mortgage payments had to be deposited into Kenmore’s
Account, and the deposits had to be by way of loans and not
shareholder contributions to capital, and it had to be intended
that some of the Kenmore payments to Gleave described in our
Findings of Fact as Gleave Income--Clear and Convincing (and not
those in Other Items--Burden of Proof) be repayments of the
asserted loans. We conclude that the likelihood of all of those
predicates being true is so slight that we are satisfied that
respondent has negatived that likelihood by clear and convincing
evidence.
We conclude, and we have found, that the income subject to
tax as found is tables 8, 9, and 10 was not from Kenmore’s
repayment of Gleave loans.
(b) $85,000 Check
On January 29, 1982, Kenmore issued a check to Gleave in the
amount of $85,000. At trial, Gleave testified as follows--
Q [Summer] Item C is a check payable to Ted Gleave. Do
you recall what that was about?
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