Ramon and Irma Ortiz - Page 12

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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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