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On the basis of the foregoing, we conclude that unexplained
bank deposits in the following amounts constitute unreported
taxable income to the Takaos for the following years:
1988 1989 1990 1991
Unexplained deposits
in issue $110,644 $61,800 $114,934 $37,277
Less:
Money from parents 3,600 3,600 3,600 3,600
Check from Nakamura -- -- -- 32,000
Unreported income
from deposits 107,044 58,200 111,334 1,677
Cash Purchases
On November 23, 1988, Akiko used $9,000 cash to purchase a
cashier's check. On February 1, 1989, Yoshinori used $55,320
cash to purchase a Mercedes Benz. On April 19, 1989, Akiko used
$3,000 cash to purchase a traveler's check. Respondent contends
that the source of the cash to make those purchases for 1988 and
1989 was unreported income. Petitioners contend that the Takaos
used cash from Akiko's cash hoard to make the cash purchases.
Both Yoshinori and Nakamura testified that the cash for the
purchase of the Mercedes Benz came from Akiko's cash hoard. As
we discussed above, although we do not doubt that Akiko
maintained a cash hoard, the record does not establish the amount
of cash on hand as of the beginning of the years in issue, or the
amount that Akiko used from funds accumulated before that time.
Nevertheless, on the basis of the testimony relating to the
purchase of the Mercedes Benz, we believe that at least some
portion of the cash for the automobile came from cash accumulated
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