Karan M. Hintze - Page 9




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          from savings account 355 to checking account 355 during 1992.4              
          Given that respondent conceded that all deposits to savings                 
          account 355 represent nontaxable income, petitioner is entitled             
          to an additional $1,260 reduction to the gross receipts figure              
          determined by respondent.                                                   
               In summary, respondent’s determination that petitioner                 
          received failed to report $13,437.62 of gross income during 1992            
          is sustained to the extent of $12,177.62.                                   
               2.   Adjustments for 1994 Tax Year                                     
               Similar to his calculations for the 1992 tax year,                     
          respondent’s reconstruction of petitioner’s gross income for 1994           
          was limited to the deposits made to petitioner’s checking                   
          accounts.  Respondent determined that petitioner made $40,221.57            
          in deposits to checking account 355 and $53,026.68 in deposits to           
          checking account 317 during 1994.5  From the $93,248.25 in gross            
          receipts, respondent subtracted $40,988.94 for deposits                     
          identified as representing receipts of nontaxable income.                   
          Respondent therefore determined that petitioner recognized gross            
          income from her business of $52,259.31 as opposed to $44,126                
          reported by petitioner.                                                     

               4  We cannot account for the $700 discrepancy between what             
          petitioner claims should be the reduction from gross receipts for           
          interaccount transfers and the amount of such transfers reflected           
          on the bank statements.                                                     
               5  As explained supra note 3, petitioner does not challenge            
          the calculation of total deposits.                                          





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