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to meet the cost of living of petitioner and his family. We
conclude on this record that respondent's determination of
unreported income of $30,492 is erroneous. We accordingly
sustain respondent's determination of unreported income only to
the extent of $20,902. In addition, since we have found that
petitioner paid home mortgage interest of $6,242 in 1989,
petitioner is entitled to a deduction in that amount, although
respondent's allowance of the standard deduction in the notice of
deficiency must be adjusted accordingly. Petitioner has not
substantiated any other Schedule A deductions.
1990
The parties have stipulated that petitioner received
nonemployee compensation of $1,035 from J&K Developers, Inc., in
1990. It has also been stipulated that petitioner operated the
Crazy Horse Saloon "during 1990". Petitioner testified that he
ceased operations on July 1, 1990. Other evidence in the record
provides some support for this assertion.9 In a personal
financial statement dated March 29, 1990, submitted to a bank to
obtain a loan, petitioner represented that his annual income was
9 The parties have stipulated that the Crazy Horse property
was sold in 1991 and have not stipulated that any operations were
conducted in that year. The only liquor license granted to the
Crazy Horse Saloon that is in evidence carries an expiration date
of Apr. 30, 1990. No State tax returns for the business beyond
1989 are in evidence. The parties have stipulated that
petitioner paid mortgage interest related to the Crazy Horse
property of $4,360 in 1990, which is less than half the amount
paid in each of the 2 preceding years.
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