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established that petitioner’s business of buying and selling real
estate was a likely taxable source of this deposit.
Petitioner alleges that the source of the deposit of
$140,000 was a loan from Mr. Margolis. Petitioner did not call
Mr. Margolis as a witness, and he did not provide any documentary
evidence to support his claim that this amount was a loan.
Petitioner’s claim that this item represents a loan is based
solely on his testimony, which was uncorroborated, inconsistent,
and not credible. Given these circumstances, petitioner’s use of
Mr. Miles’s law firm’s trust account to transact his real estate
deals, the substantial evidence of concealment of petitioner’s
real estate sales and gains therefrom, and the form of the
transaction that petitioner relies upon as a source of nontaxable
income, we are convinced that the $140,000 was not a loan.
Respondent has proven by clear and convincing evidence the
following items of income for 1988:
Item Amount
Income conceded or stipulated $183,520
Disputed income conceded on brief 144,462
Sale of 10 acres from East Lake Vista 19,522
Deposit of $140,000 on July 8, 1988 140,000
Total 487,504
Respondent allowed the following deductions for 1988:
Type of deduction Amount
Schedule C expenses $301,910
Itemized deductions 44,651
Exemptions 3,900
Total 350,461
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