- 14 -
at 686-687; Bratulich v. Commissioner, T.C. Memo. 1990-600.
The Commissioner's reconstruction need only be reasonable
in light of all the surrounding facts and circumstances.
See Petzoldt v. Commissioner, supra at 687; Giddio v.
Commissioner, 54 T.C. 1530, 1533 (1970); Schroeder v.
Commissioner, 40 T.C. 30, 33 (1963).
Respondent calculated petitioner's unreported
income on the basis of the amount of marijuana sold to
Mr. Erickson, approximately 37,000 pounds. Respondent
deducted 5,000 pounds for wrapping and packaging material
and 7,000 pounds to allow for the marijuana that
Mr. Erickson returned as wet and unusable. Respondent,
thus, determined that Mr. Erickson purchased a total of
25,000 pounds of usable marijuana.
Respondent found that petitioner and Mr. Lubiejewski
sold the marijuana to Mr. Erickson for approximately $280
per pound. Based on a net weight of 25,000 pounds of
marijuana sold, respondent calculated the gross receipts
from the sale as $7 million. Because these receipts were
split equally between petitioner and Mr. Lubiejewski,
respondent determined that petitioner's gross receipts were
$3,500,000.
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