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pieces of property--or a security interest in pieces of property
--not title--to the Cayman bank. The Cayman bank would then
advance him funds using the property as a security. Mr. Medlin
would then repay the loan in time.”
At best, John Kelly’s testimony provides a possible
explanation for what the $70,000 check represented. Petitioner
has offered no additional evidence or testimony to establish his
claim that the check was a loan. Importantly, he does not argue,
nor has he shown, that title to, or a security interest in,
property was ever transferred to Washington International for
what he purports to be $70,000 in loan proceeds. Mr. Kelly’s
testimony that Washington International and Mr. Medlin were
generally involved in loan transactions does not establish that
this amount was a loan. Indeed, his testimony was inconsistent
with petitioner’s testimony at trial that he used the Washington
International trust account as a vehicle for deferring income
from real estate sales. Petitioner has not established a link
between the unreported deposit and a nontaxable source of income.
We sustain respondent’s determination that the $59,000 deposit is
taxable as income to petitioner.
2. Deposit on September 16, 1986, of $84,521.63
FINDINGS OF FACT
On September 16, 1986, $84,521.63 was deposited into Mr.
Miles’s trust account. Ledger card No. 70042 for that trust
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