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deposits and cash purchases described below. Except to the
extent conceded, petitioners contend that the Takaos did not
underreport their income.
Unexplained Bank Deposits
In the notices of deficiency for 1988 through 1991,
respondent determined that the Takaos had unexplained bank
deposits in the amounts set forth below. However, respondent
concedes that the adjustments for unexplained bank deposits
should be reduced as shown below. Additionally, petitioners
concede that the Takaos' 1991 Japanese rental income was
understated as described below.
For 1988, the unexplained bank deposits and respondent's
concession are as follows:
Source Amount
Cash deposits to accounts in United States $85,500
Check from USA Publishing 5,000
Checks from Toraya Apartments 5,200
Check from Robert Wong 2,500
Check from Toraya Corp. 1,000
Check from Motomi 2,000
Check from Thomas Timbale 1,601
Deposits to Transamerica account 6,112
Deposits from unknown sources 15,568
Total 124,481
Less amount conceded 113,837
Unexplained deposits in issue 110,644
1 In a stipulation of settled issues, respondent conceded that
the adjustment for "Unexplained deposits" in the notice of
deficiency for 1988 should be reduced $13,837, but respondent did
not identify the source or sources from which the conceded
amounts came. For purposes of the discussion below, we assume
that the source is either cash deposits to accounts in the United
States or deposits from unknown sources. Should our assumption
be incorrect, the parties should make the appropriate correction
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