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satisfied that he made a sufficient showing to match nontaxable
funds to some of the deposits. If the funds are nontaxable, they
should be removed from unreported income determined by
respondent.
A. Payments Received on Sale of Puerto Rico House
Petitioners contend that deposits attributable to the
principal payments they received from Mr. Rodriguez in the
amounts of $25,000 and $50,000 for 1991 and 1992, respectively,
on the sale of their house in Puerto Rico should not be included
in determining their unreported income for those years. We
agree. We are satisfied, based on Mr. Ortiz' testimony, that he
had invested more in the property than the $75,000 Mr. Rodriguez
agreed to pay for it in 1988. Consequently, we find that $25,000
received in 1991 and $50,000 received in 1992, which amounts were
included in the bank deposits, are nontaxable and must be removed
from the unreported income determined by respondent.
B. Checks Received From Mr. Alvarado
Petitioners claim that the $14,100 and $13,000 checks
received from Mr. Alvarado in 1991 and 1992 were intended by the
parties to be loans. We disagree. Considering that the checks
were drawn from the account of Asomante Auto Sales, a customer of
R&X Auto Sales, that the checks originally contained notations
about advances for automobiles, and that Mr. Ortiz provided cars
to repay Mr. Alvarado for the checks, we are persuaded that the
form and substance of the transactions were automobile sales, not
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