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from the sale of a market in Mexico to petitioner’s brother.
They further contend that they have complied with the applicable
laws and regulations with respect to that sale in Mexico.7
Therefore, according to petitioners, the excess amount in
question is not taxable in the United States pursuant to the
Treaty, as well as by virtue of sections 871 and 992.
Petitioners presented no admissible evidence to support any
of their contentions. Their testimony is without merit because
it is inconsistent, incoherent, and unreliable. For example,
petitioner testified that his brother still owed him in 1998
approximately $130,000 from the purported sale. He also
testified that in 1998 he brought from Mexico $175,000, which is
a larger amount than what his brother allegedly owed him at that
time. Because petitioners claim no other source of the excess
amount besides the sale of the market to petitioner’s brother,
these two parts of testimony are irreconcilable.
Furthermore, if anything, petitioners’ testimony supports
the conclusion opposite from their contentions. For instance,
although petitioner testified that he paid taxes in Mexico, he
also stated that he did not report income from sale of the
business to his brother to any authority in Mexico. Whatever
legitimate explanation may exist for that fact, it certainly
7 Petitioners state that they owed no taxes on the
transaction because they sold the market at its cost.
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