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Columbia’s ending inventory for 1995 consisted of whatever
no-cost items remained from its 1995 opening inventory, plus the
items purchased for $18,742 (including 14 junked vehicles) plus
the $2,450 expended on supplies (as previously discussed). Thus,
Columbia’s ending inventory had a cost of $21,192.
Petitioners contend that the market value of Columbia’s 1995
ending inventory was only $1,500, which they argue was the scrap
value of the 1995 ending inventory. Petitioners have failed to
substantiate their claimed market value “by providing evidence of
actual offerings, actual sales, or actual contract
cancellations.” Thor Power Tool Co. v. Commissioner, 439 U.S.
522, 535 (1979). In any event, petitioners’ contention is
contradicted by Samuel’s admissions in the Owner’s/Rebuilder’s
Affidavits filed with the DMV in 1995, certifying that the NADA
estimated fair market values of just four of the rebuilt
automobiles in Columbia’s inventory totaled $32,100.10
Petitioners’ contention is further undermined by evidence showing
that these four rebuilt automobiles, along with another vehicle
10 Although Columbia transferred title to the rebuilt
vehicles to Monty for no consideration before the vehicles were
sold to third parties, Samuel testified that the transfers to
Monty were not gifts, stating: “The fact is that these vehicles
were put in his [Monty’s] name in order to sell it [sic]. All of
them were reported as income through our business.”
Consequently, we ignore petitioners’ transfers of the rebuilt
automobiles to Monty.
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