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Locksmith operated, and the corporation paid them $1,500 per
month rent. On the 1983 joint return, petitioner and Emmens
reported rental income from Nelson Locksmith of $12,301.2
Emmens sold Nelson Locksmith in January 1984. On their 1984
joint return, petitioner and Emmens reported a $20,753 gain
attributable to the sale of the business and rental income of
$2,243.
Petitioner was an authorized signatory on the bank accounts
of Nelson Locksmith. Additionally, petitioner occasionally wrote
checks on this account for both business and personal purposes.
Criminal Activity
During the years in issue, Emmens was involved in narcotics
trafficking. He and various other individuals, including John
Sydoriak (Sydoriak) and Vincent Kadyszewski (Kadyszewski),
smuggled substantial amounts of marijuana and cocaine into the
United States from the Bahamas.
The typical narcotics transaction would proceed as follows.
Three boats would depart from Delray Beach, Florida (Delray
Beach), and travel to Bimini, Bahamas (Bimini). The boats were
2
The parties stipulated that for 1983 Nelson Locksmith
paid petitioner and Emmens $1,500 per month, and that they
reported $12,301 of rental income on their joint return. We
realize that the reported rental income for 1983 is less than
$18,000 ($1,500 x 12). The record is silent as to whether
petitioner and Emmens received $1,500 each month for 12 months in
1983. Thus, we find that the $5,699 is a concession by
respondent in favor of petitioner.
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