Leo and Alla Goldberg - Page 20

                                        -20-                                          
          Vehicle Resale Business                                                     
               Petitioner conducted a vehicle resale business as a sole               
          proprietorship.  The vehicle resale business was reported on                
          petitioners' Schedule C under the name Coastline Ltd., Leo                  
          Goldberg sole proprietor.  Petitioners paid $125 and $3,650 from            
          Schwab account number 3843 for expenses of the vehicle resale               
          business.                                                                   
               During 1990 and 1991, Kortava transferred $72,544 of his               
          personal funds to petitioner to purchase cars for resale in                 
          Russia.  In 1990, petitioner received $38,000 from Kortava and              
          deposited this amount in California Federal account number 6130,            
          one of his personal accounts.  Petitioners reported $72,544 in              
          gross receipts on Schedule C of their 1991 return.  The contract            
          for the sale of vehicles required specific vehicles to be                   
          delivered to Russia.  If petitioner could not provide those                 
          specific vehicles, the money was to be returned to Kortava in               
          Russia.  When it was obvious that petitioner would not be able to           
          meet the requirements of the contract, the agreement was                    
          modified, and petitioner sent to Russia his personal vehicle, a             
          1984 Mercedes Benz (Mercedes), and another replacement vehicle in           
          1991.  The Mercedes had scratches and some additional damage when           
          petitioner shipped it to Kortava.  Kortava wired to petitioner              
          $20,000 as consideration for petitioner's shipping the Mercedes             
          to Russia.                                                                  






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