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totaled $2,628.15 Accordingly, we conclude that petitioner is
entitled to a cost-of-goods-sold allowance of $2,628 with respect
to the $3,000 in sales to Ted and Brian P. and sustain
respondent’s determination only to the extent of $372.
Respondent determined that petitioner had unreported income
of $2,775 in 1990 from the sale of additional electronic
equipment to Howard S. Howard S. paid petitioner $2,775 for
electronic equipment in that year. Petitioner sold him a 52-inch
rear-projection television and two answering machines. The rear-
projection television cost $2,902, including taxes and shipping,
while the answering machines cost her $210.16 As petitioner has
shown that she had product costs for goods transferred to Mr. S.
in 1990 that exceed the amount that respondent determined was
paid to her by Mr. S., we conclude that petitioner has
demonstrated error in respondent’s determination and do not
sustain it.
15 Petitioner’s brief overstates by $100 the cost of
equipment purchased on Feb. 22, 1990, and resold to Ted and Brian
P.
16 Mr. S.’s complaint in his previously noted lawsuit
against petitioner states that he never received the projection
television set. His later affidavit states, however, that he
received the set, but that it was in defective condition and he
never received a replacement. Petitioner has submitted evidence
of the purchase of the set, its delivery to Mr. S., and two
service calls to repair the set. On this record, we conclude
that Howard S. paid for and received a 52-inch rear-projection
television.
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