Robert G. Bacon and Barbara Bacon - Page 15




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          provided him with the money to purchase the house.  When he was             
          asked how his grandmother managed to accumulate $50,220 in cash,            
          Mr. Ras was unable to provide an answer.  When he was asked who             
          issued the checks for the remainder of the purchase price, Mr.              
          Ras could not provide a definite answer, nor could he deny that             
          Mr. Bacon provided him with some of the checks.  When he was                
          asked why he signed a $64,000 mortgage in favor of Mrs. Bacon if            
          she had not lent him the money, Mr. Ras said that Mr. Bacon told            
          him to sign and that he would sign anything that Mr. Bacon gave             
          him.                                                                        
               We do not find Mr. Ras’ explanation to be credible.  On the            
          basis of the facts, we find that petitioners provided Mr. Ras               
          with $64,000 and that he in turn executed a mortgage on the house           
          in the amount of $64,000.                                                   
               C.  Real Estate Deposits                                               
               Petitioners argue that respondent should reduce their                  
          unreported taxable income under the bank deposit analysis by                
          $9,000 for 1988 and $4,000 for 1990.  According to petitioners,             
          they issued checks totaling $13,000 to make deposits on                     
          unconsummated real estate transactions.  This resulted, according           
          to petitioners, in the return of $13,000 of nontaxable funds that           
          were either redeposited or cashed.                                          
               Petitioners have not established that these transactions               
          ever took place or that the amounts in question were returned to            






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