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T.C. 592, 600 (1956), affd. in part and revd. in part on other
grounds 258 F.2d 544 (5th Cir. 1958). A reimbursement is in the
nature of a repayment of borrowed funds, which is not taxable.
See Gulf Life Ins. Co. v. United States, 35 Fed. Cl. 12, 19
(1996), affd. 118 F.3d 1563 (Fed. Cir. 1997).
B. Whether Petitioners Proved That Their Expenses Totaled
$91,250
Respondent contends that petitioners have not substantiated
the amount of their expenditures on behalf of Mr. Stern. We
disagree. See Cohan v. Commissioner, 39 F.2d 540, 544 (2d Cir.
1930), affg. in part and remanding 11 B.T.A. 743 (1928). Mr.
Stern paid for nothing except his doctor bills during the 5 years
that he lived with petitioners. Petitioner paid for everything
else that Mr. Stern needed or wanted, including hotels,
transportation, food, clothing, personal items, medicines and
balms, hearing aid, eyeglasses, denture and eyeglass repair,
laundry, dry cleaning, office supplies, sundries, periodicals,
and many other expenses. Petitioner testified credibly that
petitioners spent more than $91,250 on behalf of Mr. Stern. We
conclude that petitioners received $91,250 in nontaxable
reimbursement in 1993.4
4 Petitioners point out that their position here was
previously accepted by State and Federal courts. The Marion
Superior Court, Probate Division, found that petitioner was
entitled to $91,250 as reimbursement for expenses petitioner
incurred on Mr. Stern’s behalf. Judge Daniel Tinder of the U.S.
District Court for the Southern District of Indiana said in
(continued...)
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