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deposits when he endorsed the $676,720.68 check; (d) used the
$666,720.68 time deposit as collateral for two loans in his own
name in the amounts of $140,000 and $500,000; (e) used the
$500,000 loan to invest in the CFA Notes, from which he claimed a
$150,000 short-term capital loss on his 1984 return; (f) bought
the Yreka property in his own name with the $140,000 loan and
claimed a loss from the property on his 1984 return; (g) used the
$666,720.68 time deposit to repay both loans and had the
remaining proceeds deposited in the account of A.C. Bingham &
Associates; and (h) did not report the $676,720.68 on his 1984
return.
Respondent further contends that petitioner did not give any
of the land sale proceeds to the Lopps in 1984 and that
petitioner knew that he was required to report as income any of
the funds he did not give to the Lopps. However, we disagree
that respondent has so proven. The special agent and revenue
agent testified that petitioner did not return any of the money
to the Lopps in 1984, but they said that he returned $200,000 to
them in 1985. However, neither agent said how he or she learned
whether or when petitioner returned funds to the Lopps; e.g.,
from written documents or interviews with witnesses with personal
knowledge. Respondent did not offer any such documents or call
any witnesses who had personal knowledge. Also, respondent did
not seek to offer a report containing this information into
evidence under the hearsay exception for public records. Fed. R.
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