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loans. Accordingly, we conclude that respondent correctly
included the amounts of these checks as income in the bank
deposits analysis.
C. Loan From Mr. Luna
Petitioners argue that respondent should have reduced the
amount determined to be unreported income in 1991 by $20,000 to
account for the loan they received from Mr. Luna in May 1991. In
our opinion an adjustment is not warranted because petitioners
failed to provide any evidence that they deposited $20,000 from
this loan into either of the bank accounts. Five days after
receiving the $20,000 loan, petitioners paid $29,767.24 to close
on the purchase of investment property in Marydia, Florida.
Because their bank records do not show that petitioners withdrew
$29,767.24 in May 1991, we think respondent's explanation that
petitioners used the $20,000 loan for closing costs on this
property is reasonable.
D. Interest Payments Received From Mr. Rodriguez
Petitioners have conceded that the $18,000 and $4,000
interest payments they received in 1991 and 1992, respectively,
from Mr. Rodriguez from the sale of their house in Puerto Rico
are taxable income to them in those years. The interest deposits
of $3,500 in 1991 and $3,000 in 1992 were not included in
unreported income, and such amounts should not be removed from
the unreported income determined by respondent.
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