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represented unreported income. On March 11, 1985, a check (No.
601) for $63,212.50 was drawn on petitioner’s Freedom account.
This check was payable to the order of “Freedom Financial Center”
and was endorsed by Ms. Allen. The account balance was reduced
from $64,775.80 to $1,563.30 as a result of this check.
On March 11, 1985, petitioner purchased a cashier’s check
for $59,000 from Freedom. Petitioner was listed as both the
remitter and the payee. On March 12, 1985, petitioner deposited
the proceeds of this check into his Tucker State Bank account.
Respondent determined that the $59,000 deposit was taxable as
income to petitioner for 1985.
OPINION
Petitioner contends that the March 12, 1985, deposit of
$59,000 was traceable to the $70,000 check from Washington
International and that respondent did not determine that the
proceeds of this check represented unreported income. Petitioner
argues that after the $70,000 check was deposited to his Freedom
account, Ms. Allen made a withdrawal of $63,212.50 in the form of
check No. 601 and used the proceeds to purchase the $59,000
cashier’s check payable to Mr. Medlin and deposited in his Tucker
bank account.
Petitioner did not question Ms. Allen at trial regarding her
endorsement on check No. 601 and whether she used that check to
purchase the $59,000 cashier’s check from Freedom. Petitioner
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