Mahendra K. Tandon - Page 12

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          receipts into the AT #3 account, the Society National Bank                  
          account, the Huntington Bank account, and the Independent Savings           
          Bank account.  These deposits totaled $112,531.56.  We conclude             
          that deposits into these accounts constitute income to petitioner           
          in 1988.  After reducing the deposits by the $50,000 petitioner             
          reported on his tax return, petitioner had $62,531.56 in                    
          unreported income from medical services in 1988.                            
               B.   Rental Income                                                     
               Respondent contends that petitioner received rental income             
          in the amounts of $1,763, $4,195, $3,960, and $3,125 in 1985,               
          1986, 1987, and 1988, respectively.  Petitioner contends that he            
          received rental payments as an agent.                                       
               Section 61(a)(5) includes in gross income all income from              
          the rental of property.  Ms. Alshabani testified that she rented            
          property from petitioner and made rental payments to him.  Other            
          renters made their checks payable to petitioner.  Petitioner                
          endorsed these checks.                                                      
               Petitioner presented no evidence that he paid over any of              
          the money he received as rent to the "principals" for whom he was           
          supposedly acting as an agent.  Furthermore, it was not until May           
          of 1989, well after the IRS began investigating petitioner and              
          petitioner's father had died, that tax returns were filed                   
          reporting that the rental income belonged to petitioner's father.           
               Although Ms. Alshabani testified that she rented property              
          from petitioner and paid him rent, there is no evidence of the              

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