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business activities. In Bystry v. United States, supra at 576,
579, the taxpayers transferred no land or other assets to their
business and never did business as a corporation.
Petitioners point out that the taxpayers in Barker and
Bystry had no corporate bank accounts and contend that this fact
is dispositive. We disagree. In contrast to the facts in those
cases, Rosewood Kennels, Inc., owned property, borrowed money,
obtained insurance, and did business.
3. The Invoices
Petitioners contend that their employee, Onni, had the
Rosewood Kennels, Inc., letterhead printed and used it without
their knowledge. Petitioners both testified that Onni concluded,
without petitioner's telling him, that Rosewood Kennels was
incorporated, and that petitioner was president and Mr. Moye was
secretary/treasurer. We do not find petitioners' testimony in
this regard to be credible. We decide whether a witness is
credible on the basis of objective facts, the reasonableness of
the testimony, the consistency of statements made by the witness,
and the demeanor of the witness. Quock Ting v. United States,
140 U.S. 417, 420-421 (1891); Wood v. Commissioner, 338 F.2d 602,
605 (9th Cir. 1964), affg. 41 T.C. 593 (1964); Pinder v. United
States, 330 F.2d 119, 124-125 (5th Cir. 1964); Concord Consumers
Hous. Coop. v. Commissioner, 89 T.C. 105, 124 n.21 (1987).
Petitioners' testimony about the letterhead was implausible. We
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