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Respondent relies on the sale of 10 acres in East Lake Vista
as evidence of an underpayment for 1988. Considering our
discussion above with respect to the sales of acres from East
Lake Vista in 1986, we hold that respondent has proven by clear
and convincing evidence that petitioner owned a 50-percent
interest in East Lake Vista at the time of the sale in 1988 and
that he realized gain of $19,522 in 1988 from the sale of his 50-
percent interest.
Respondent also relies on the $140,000 that was deposited
into Mr. Miles’s law firm’s trust account for petitioner on July
8, 1988. Petitioner established that the $140,000 was traceable
to a $140,000 check from Dean Witter and that the check stub was
signed “RECD BY Richard Margolis”. Respondent has demonstrated
by clear and convincing evidence that petitioner was involved in
the business of buying and selling real estate; he received
substantial amounts of income from numerous property transactions
in this business; those property transactions were carried out
using trustees, including Mr. Miles; proceeds from those
transactions were deposited into Mr. Miles’s law firm’s trust
account; and those proceeds represented income taxable to
petitioner but which he failed to report. By petitioner’s own
account, the $140,000 check from Dean Witter and allegedly from
Mr. Margolis was attributable to a transaction which was in form
a sale of petitioner’s property. We hold that respondent has
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