- 10 - States, 591 F.2d 1243, 1245 (9th Cir. 1978); Clayton v. Commissioner, supra; DiLeo v. Commissioner, 96 T.C. 858, 869 (1991), affd. on other grounds 959 F.2d 16 (2d Cir. 1992); Parks v. Commissioner, supra. Petitioner contends that some of the funds that she deposited in her bank accounts were not taxable to her because those funds belonged to the photo shop and not to her. She contends that, as a favor to the photo shop, she deposited photo shop funds in her bank accounts at the close of the day and withdrew them the next business day to return those funds to the photo shop. We disagree. Petitioner’s testimony is the only evidence supporting her contention. We decide whether a witness is credible based on objective facts, the reasonableness of the testimony, and the demeanor and consistency of statements made by the witness. Quock Ting v. United States, 140 U.S. 417, 420-421 (1891); Wood v. Commissioner, 338 F.2d 602, 605 (9th Cir. 1964), affg. 41 T.C. 593 (1964); Pinder v. United States, 330 F.2d 119, 124-125 (5th Cir. 1964); Concord Consumers Hous. Coop. v. Commissioner, 89 T.C. 105, 124 n.21 (1987). We may discount testimony which we find to be unworthy of belief, but we may not arbitrarily disregard testimony that is competent, relevant, and uncontradicted, Conti v. Commissioner, 39 F.3d 658, 664 (6th Cir. 1994), affg. and remanding on another ground 99 T.C. 370 (1992)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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