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gain be reduced by $5,084 to reflect the cost of an engine
overhaul for the tractor.
Respondent offers the following three checks as the basis of
his determination of the purchase price. Each check is a
cashier’s check, drawn on London Bank & Trust of London,
Kentucky, with Gary and Fairy Smith (the purchasers of the
tractor and trailer) as remitters.
Number Check Date Amount Payment Date Payee Indorser
091724 9/14/93 $500 9/15/93 Gary or Fairy Smith Gary Smith1
091725 9/14/93 24,000 9/17/93 Petitioner Petitioner2
091726 9/14/93 13,500 9/20/93 Petitioner Petitioner3
1Blank indorsement
2Blank indorsement
3Indorsed for petitioner by petitioner wife, for deposit only
At trial, petitioners disputed receiving two of these checks--
numbers 091724 and 091726. Evidence received into the record,
however, shows that check number 091726 was received by
petitioners because it was indorsed “for deposit only,” “Will
Barck by Janie Barck.” The purpose of the other disputed check,
number 091724, is unclear; why the purchasers would obtain a
cashier’s check payable to themselves is unknown. Respondent
argues that this check was used by the purchaser as a retainer in
a “good-faith effort in the sale.” Although there is no evidence
that petitioners received the cashier’s check itself, the
proximity of the check number, check date, and payment date of
the disputed check to those of the other checks indicates that
this amount was most likely given to petitioners in cash for a
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Last modified: May 25, 2011