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Chorny could not recall whether petitioner lent him money during
1990 or 1991 nor could he recall whether he paid money to
petitioner for any reason during 1990 or 1991. Petitioner's
explanation at trial about the existence of loans is not
credible. For example, petitioner stated that he gave to Chorny
a $9,000 check on September 20, 1991, representing a short-term
loan that Chorny paid back shortly thereafter. The $9,000 check
that petitioners received from Chorny was dated September 2,
1991.
Petitioners have not established by a preponderance of the
evidence that the checks from Chorny represented loan repayments.
Thus, respondent's determination that petitioners failed to
report $20,472 and $9,250 in 1990 and 1991, respectively, as
Schedule C income from real estate consulting activities will be
sustained.
15 Hastings--Option Payment
Respondent determined that petitioners failed to report on
their 1991 return the $10,000 option fee that was received from
the Woods.
As part of the lease option agreement for 15 Hastings,
petitioners received an option fee from the Woods in the amount
of $10,000. This amount was deposited with Escrow Masters on
November 3, 1989. The parties have agreed that the option fee
was available at any time following the consummation of the
option agreement. On December 1, 1989, petitioners withdrew the
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