- 8 - Inadequate books and records were maintained relating to funds received by the Stores for the rental of videos and relating to the partnership’s and to petitioners’ income from the Stores. Most of the records that allegedly were maintained were retained only for a short period of time and were not introduced into evidence. No records appear to have been maintained relating to checks and credit card payments received for rental of the videos. Petitioners presented no receipts, invoices, photographs, or other credible evidence to establish and verify petitioner’s ownership and sale of, and tax basis in, personal videos that would explain the nature and source of the bank deposits in question. Petitioners have failed to establish the nontaxable nature of the bank deposits treated by respondent as unexplained and as taxable income. We sustain respondent’s adjustments to the partnership's and to petitioner's income based on the unexplained bank deposits. Reimbursements for Leasehold Improvements On March 20, 1989, the partnership leased from MC-Peoria Limited Partnership (Peoria) a portion of a building for Store 5. Under terms of the lease, the partnership was obligated to make certain capital improvements to the building, and Peoria wasPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011