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those years. Respondent determined those adjustments on the
basis of a source and application of funds analysis for each of
those years. Subsequently, respondent closed Sylvia’s audit
without issuing a notice of deficiency.
D. Source and Application of Funds Analyses
Following trial, the parties met in an effort to resolve
their differences regarding the source and application of funds
analyses for the Johnson family members. In a joint finding of
fact set forth in their opening briefs, the parties indicate that
Appendix 5 of respondent’s opening brief shows in black the items
of the source and application of funds analyses for which the
parties are in agreement, and that Appendix 5 shows in red the
items for which the parties are not in agreement. We show the
items reflected on respondent’s Appendix 5 in our Appendices A
through I. To the extent possible, in those appendices, we have
incorporated explanations for the differences in amounts
reflected on the source and application of funds analyses for
Frank and Katherine as gifts to Larry, Ronnie, and Sylvia, from
the amounts reflected as excess applications of funds over
sources of funds on the separate source and application of funds
analyses for Larry, Ronnie, and Sylvia. Except for the items
specified below, the parties agree on the amounts shown in source
and application of funds analyses set forth infra in Appendix A.
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