- 6 - 1994) (Hernandez II), we dealt with similar facts regarding whether interest paid on the redemption of tax certificates sold by Pasco County, Florida, for delinquent taxes owed on real property is excluded from gross income. In both cases, we held that the interest is not excluded from gross income under section 103 because the tax certificates are not obligations of a State or political subdivision. Hernandez v. Commissioner, T.C. Memo. 1998-46. We follow our prior holdings, and we sustain respondent’s determination that interest from the tax certificates is includable in income under section 61(a)(4). In Hernandez I and II, petitioner argued that he purchased the tax certificates at auction on behalf of other people. At both trials, petitioner failed to present witnesses and documents to support his arguments, and we held that petitioner must include the interest as his income. In this case, petitioner also asserted that the tax certificates were purchased on behalf of third parties. Vincent Hernandez (Vincent), petitioner’s brother, testified generally that he began investing in tax certificates through petitioner in 1984. Vincent also testified that all of the interest income he received through petitioner was deposited in Vincent’s account, and that Vincent reported all of the interest income on his Federal income tax return. Vincent did not produce any of his tax returns, bank statements, or other documents to lend credencePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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