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deposits. Finally, respondent then added petitioner’s identified
cash expenditures to total net bank deposits to determine
petitioner’s unreported income.
At trial, petitioner did not question respondent’s
determination as to the amount of unreported income she received
in 1996 and 1997. Petitioner has not alleged, nor have we
discovered, any error in respondent’s income reconstruction using
the bank deposits and cash expenditures method. Petitioner
produced no evidence of any nontaxable sources for the
unexplained funds deposited in her bank account or the cash used
to make payments in any of the years in issue. Accordingly, as
asserted by respondent at trial, we conclude that petitioner had
unreported income in the amounts of $8,856 in 1996 and $23,767 in
1997.
D. Dependency Exemption
Section 151(c) allows a taxpayer to claim an exemption for
each dependent, as defined in section 152. In order to qualify
as a dependent, an individual must be related to the taxpayer in
one of the ways enumerated in section 152(a)(1) through (8), or,
if the individual is unrelated to the taxpayer, the individual
must live with the taxpayer and be a member of the taxpayer’s
household throughout the entire taxable year of the taxpayer.
Sec. 152(a)(9); Trowbridge v. Commissioner, 268 F.2d 208 (9th
Cir. 1959), affg. 30 T.C. 879 (1958); Turay v. Commissioner, T.C.
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