Bruce A. and Kathy J. Krist - Page 4




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               Petitioners had four bank accounts:  one was Mrs. Krist's              
          personal account; one was an account for the locksmith business             
          and firearms service (locksmith account); one was for the                   
          rehabilitation of the house and the limousine business                      
          (rehabilitation account); and one was for the rental activity               
          (rental account).  Receipts from the locksmith business and the             
          firearms service were deposited in the locksmith account and                
          receipts from the rental activity were deposited in the rental              
          account.                                                                    
               Petitioners took out a bigger loan than was required for the           
          purchase of the house because they needed money to restore it.              
          They put the borrowed money in an account that belonged to                  
          petitioner's mother so that it would earn interest.  His mother             
          would apportion their borrowed money as they needed it.  In 1995,           
          they received $10,200 of their borrowed money from the mother’s             
          account and deposited it in the rehabilitation account along with           
          deposits from the limousine business.                                       
               As part of the locksmith business, petitioner made keys for            
          houses, businesses, and cars, and also made keys for repossessed            
          automobiles for one of his clients.  Much of petitioner's work              
          was done in the evenings after regular business hours.  BK                  
          Locksmith was located in petitioner's garage (apparently not                
          detached) at his house in Hazel Crest, Illinois.  Because one of            
          his clients was the management company of an apartment building             





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