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Query System at Bank of America; (3) a copy of NationsBank’s
records concerning a loan to Mr. Gowni in 1996; (4) a copy of
NationsBank’s records concerning a loan to Mr. Gowni in 1997;
(5) a copy of NationsBank’s records concerning a loan to
Mr. Gowni in 1999; and (6) a copy of NationsBank’s records
concerning a loan to Ava Anthony in 1999. During the examination
of the Gownis’ bank records, the IRS requested that the Gownis
provide documentation and explanations as to any nontaxable items
that were deposited to their personal bank accounts. The IRS
received information about Mina of Sanford’s shareholder loan
account in response to those requests.
The examination of the Gownis’ income tax returns for 1998
and 1999 and the evaluation and analysis of their bank records
and other information took approximately 1 year and consumed more
than 150 hours of revenue agent time.
Results of the Examination of the Gownis’ Income Tax Returns
A. 1998
The IRS made the following determinations with respect to
the Gownis for 1998:
1. Distributable Gain From the Sale of Property by
Tomson
Tomson had a $413,696 basis in the property that it sold to
Sembler and recognized a $408,304 gain on the sale. The IRS
determined that Tomson was an S corporation during 1998 and that
$204,152 of this gain was attributable to the Gownis. Because
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