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he listed his "net profit"6 from the Crazy Horse Saloon as
$15,748. This representation is an admission by petitioner. On
December 31, 1987, petitioner submitted a financial statement to
a bank in which he represented that his annual income was
$20,000.
Petitioner had a wife and two children and testified that he
provided their support in 1988. It has been stipulated that
petitioner paid mortgage interest totaling $16,253 in 1988, of
which $9,968 related to the Crazy Horse property and $6,285 is
unspecified. Based on the entire record, we find that the $6,285
in mortgage interest related to petitioner's residence at the
11th Street address.
Petitioner has stipulated or admitted to income totaling
$30,000 in 1988. Petitioner denies any additional unreported
income beyond the $15,748 in net profit from the Crazy Horse
Saloon. Respondent determined unreported income of $29,147, in
addition to other income determinations of $14,252, for a total
of $43,399, and apparently takes the position that petitioner's
cost of living must have required income in that amount. In the
absence of any BLS evidence regarding petitioner's cost of
living, we believe $30,000 in total income was adequate to meet
the cost of living of petitioner and his family. We conclude on
6 On the Schedule C, petitioner listed "net profit" only,
without making any entries for gross receipts, cost of goods
sold, or deductions.
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