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petitioner’s repayment checks bounced, however, or were
reinvested, on the basis of petitioner’s representation that she
would invest this money in real estate on behalf of Tammy M.
Tammy M. recovered the amount of her loan to petitioner, but she
received no more than that.
In another transaction in early 1990, petitioner received
$2,500 from Vania W. Petitioner executed a letter memorandum
dated February 3, 1990, acknowledging her receipt of $2,500 from
Vania W., which she promised to invest and to repay in 30 days
with $1,000 interest. Petitioner subsequently wrote two checks
in March 1990 totaling $2,650 on a Real Services’ account, made
payable to herself or to cash. Although the memorandum line on
the checks indicated that they were executed as a “return” or
“replacement” for Ms. W., each check was endorsed only by
petitioner herself.
In the summer of 1990, petitioner borrowed $2,500 from a
tennis-playing partner named Phillip B.; he charged her no
interest on the loan. She made substantial repayments a few
months later.
5. Petitioner’s 1991 and 1992 Taxable Years
For the last two years in issue, 1991 and 1992, respondent
determined petitioner’s unreported income by applying cost-of-
living survey information published by the Bureau of Labor
Statistics (BLS). Respondent used BLS tables that classify the
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