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we find that the $32,000 check from Nakamura constituted a loan
to Yoshinori; therefore, it was not taxable income to the Takaos.
Other Unexplained Bank Deposits
Petitioners assert that the remaining deposits for which
there is no explanation do not exceed reported income. Under the
bank deposits method, generally bank deposits for the year are
totaled and nontaxable amounts are eliminated. The balance
constitutes a reconstructed gross income. Taxable income then is
calculated in the usual way using the reconstructed gross income.
If the resulting figure differs from the taxable income reported
on the tax return for that year, the difference is presumed to
constitute unreported taxable income. United States v. Hall, 650
F.2d at 997 n.4. We cannot ascertain from the record the total
amount of bank deposits the Takaos made during each of the years
in issue. Rather, for each year the parties refer to the amounts
in issue as "unexplained deposits". Petitioners have not shown
that the deposits in dispute represent total deposits for the
years in issue. Consequently, we are not persuaded that the
remaining deposits, in effect, are included already in reported
income. Accordingly, with regard to the remaining unexplained
bank deposits, except to the extent that any of the remaining
unexplained bank deposits were included in respondent's
concession in a stipulation of settled issues, we sustain
respondent.
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