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liabilities that were used in computing petitioners’ asserted
unreported income.
Cash in Bank
Institution 12/31/92 12/31/93 12/31/94 12/31/95
Nations Bank 5140020-576-9 $220 $2,639 $7,277 $21,877
Total 220 2,639 7,277 21,877
Notes Receivable
Description 12/31/92 12/31/93 12/31/94 12/31/95
Blake Carter – $115,000 $111,359 $107,357
Total –- 115,000 111,359 107,357
Investments
Property 12/31/92 12/31/93 12/31/94 12/31/95
1008 Page Place $140,000 $140,000 – --
1148 Independence 58,000 –- –- --
2002 Netherland Inn Road 109,000 –- –- --
Porsche – –- $4,954 --
330 Lynn Garden 59,000 59,000 59,000 59,000
1011 Parham Place 265,000 265,000 265,000 265,000
1037 Parham Place 160,000 160,000 160,000 160,000
Lot 29 Rotherwood 20,000 20,000 20,000 1 410,000
2 Acres Rotherwood 10,000 10,000 10,000 10,000
Condo’s –- –- 310,667 248,000
Total 821,000 654,000 2 889,621 762,000
1 On the basis of the parties’ stipulations, it appears that this figure
should be $20,000, which is consistent with the $762,000 total indicated for
Dec. 31, 1995.
2 The sum should be $829,621. The discrepancy is not explained in the
record. Because respondent determined a decrease in petitioners’ net worth
for 1994, the apparent error does not operate to petitioners’ detriment.
OPINION
I. Unreported Income
A. The Net Worth Method
Respondent determined deficiencies in petitioners’ 1993 and
1995 income taxes by using the net worth method to reconstruct
their income. Petitioners bear the burden of overcoming the
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