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unreported income in the amounts determined by respondent.
A final note with respect to the unreported income issue. In
her posttrial brief, Ms. Ng asserts that "the nature of this case
cries out for a net worth analysis" and requests the Court to
"direct the parties to cooperate in an effort to do a net worth
analysis to reach a more accurate and just result." We will not
accede to Ms. Ng's request. Whatever Ms. Ng's net worth, it is not
relevant to whether the bank deposits and other income traced to
her during the years under consideration constitute income to her.
What happened to this income after Ms. Ng received it does not
change its character as income. Moreover, there is "no requirement
that the Commissioner use the net worth method for computing
income." Estate of Mason v. Commissioner, 64 T.C. at 662.
Issue 2. Hong Kong Restaurant Losses
We now turn our attention to whether Ms. Ng is entitled to
claimed pass-through losses from her solely owned S corporation,
Hong Kong Restaurant, Inc. This, in turn, depends upon whether Ms.
Ng had sufficient basis in that corporation to claim the losses.
Pursuant to section 1366, S corporation income, losses,
deductions, and credits are passed through pro rata to
shareholders. The amount that can be claimed is limited to the sum
of a shareholder's adjusted basis in the corporate stock, and his
1(...continued)
Bank account are the income of Ms. Ng.
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