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for 1988. Petitioners claimed $47,999 for home mortgage interest
on their 1989 Schedule A. Petitioners substantiated $24,402 of
the 1989 home mortgage interest. Petitioners included a
Form 1098 Mortgage Interest Statement with their 1989 return.
The Form 1098 showed that "Jose A. Ayala" paid "$23,---.--"
(illegible copy) in interest to Perpetual Savings Bank.
Petitioners reported gross receipts of $13,342 from L&L on
their 1988 Schedule C. Petitioners deducted $4,645.03 as
expenses on their 1988 Schedule C. Petitioners reported a net
profit of $8,696.97 on their 1988 Schedule C. Petitioners filed
a Schedule SE, Social Security Self-Employment Tax, for 1988.
Petitioners reported $8,696.97 from their 1988 Schedule C as the
amount of net profit subject to the self-employment tax.
OPINION
Unreported Income
Petitioners have the burden of proving that respondent's
determinations are erroneous. Rule 142(a). Once there is
evidence of actual receipt of funds by the taxpayer, that
taxpayer has the burden of proving that all or a part of those
funds are not taxable. Tokarski v. Commissioner, 87 T.C. 74
(1986). At trial, petitioner acknowledged that he received the
check from LIC to LCC for $60,000. Petitioner testified that he
received a salary from L&L of approximately $24,000 per year;
however, he reported $13,342 for 1988. Petitioner's explanation
is that the $60,000 check from LIC and the difference between the
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