-2-
Opinion . . . . . . . . . . . . . . 24
Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Unreported Income--Bank Deposits . . . . . . . . . . . . . . . 31
Unreported Income--Like-Kind Exchange . . . . . . . . . . . . 32
Unreported Income--Unemployment Compensation . . . . . . . . . 34
Unreported Income--Kortava . . . . . . . . . . . . . . . . . . 34
Mercedes . . . . . . . . . . . . . . . . . . . . . . . . 37
Saddle Rock and Martis Landing . . . . . . . . . . . . . 38
Unreported Income--Deeds in Lieu of Foreclosure . . . . . . . 42
Unreported Income--Interest . . . . . . . . . . . . . . . . . 45
Schedule C Income--1990 . . . . . . . . . . . . . . . . . . . 45
Business School . . . . . . . . . . . . . . . . . . . . . 46
Vehicle Resale Business . . . . . . . . . . . . . . . . . 46
Schedule C Expenses--1991 . . . . . . . . . . . . . . . . . . 48
Vehicle Resale Business . . . . . . . . . . . . . . . . . 48
Business School . . . . . . . . . . . . . . . . . . . . . 50
Unreported Income--Chorny . . . . . . . . . . . . . . . . . . 51
15 Hastings--Option Payment . . . . . . . . . . . . . . . . . 52
15 Hastings--Lease Versus Sale . . . . . . . . . . . . . . . . 55
Unreported Income--Clerical Fee . . . . . . . . . . . . . . . 59
Section 6651(a)(1) Addition to Tax . . . . . . . . . . . . . . 59
Section 6662(a) Penalty . . . . . . . . . . . . . . . . . . . 60
MEMORANDUM FINDINGS OF FACT AND OPINION
COHEN, Chief Judge: Respondent determined deficiencies in,
additions to, and penalties on petitioners' income taxes as
follows:
Additions to Tax and Penalty
Sec. Sec. Sec.
Year Deficiency 6651(a)(1) 6653(b)(1) 6663
1988 $108,150 --- $81,044 ---
1990 108,277 $27,069 --- $81,208
1991 1,926 29,349 --- 86,945
In the alternative to fraud, respondent determined that
petitioners were liable for the section 6653(a) addition to tax
for negligence for 1988 and the section 6662(a) accuracy-related
penalty for 1990 and 1991. Unless otherwise indicated, all
section references are to the Internal Revenue Code in effect for
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