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2. Petitioners’ Contentions
Petitioners contend that B&W did not receive barter income
in fiscal year 1995 because Kelso and B&W paid each other in full
after B&W’s fiscal year 1995.
Badell testified that he did not tell Mr. Kelso or Blume
that he would work off the cost of the roofing services. Badell
testified that B&W did not try to collect the debt Kelso owed it
because B&W expected that Kelso would pay B&W eventually. Badell
also testified that he did not know whether the work Kelso did on
his roof was a large or small project and that he did not
remember seeing roofing equipment or materials at his home
because he was not home during the day when the roofers were
there. We disagree. We decide whether a witness is credible
based on objective facts, the reasonableness of the testimony,
the consistency of statements made by the witness, and the
demeanor of the witness. See Quock Ting v. United States, 140
U.S. 417, 420-421 (1891); Wood v. Commissioner, 338 F.2d 602, 605
(9th Cir. 1964), affg. 41 T.C. 593 (1964); Pinder v. United
States, 330 F.2d 119, 124-125 (5th Cir. 1964); Concord Consumers
Hous. Coop. v. Commissioner, 89 T.C. 105, 124 n.21 (1987). We
may discount testimony which we find to be unworthy of belief,
see Tokarski v. Commissioner, 87 T.C. 74, 77 (1986), but we may
not arbitrarily disregard testimony that is competent, relevant,
and uncontradicted, see Conti v. Commissioner, 39 F.3d 658, 664
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