7
the Chevron gas station in 1995.3 We conclude that petitioner
had a basis of $5,000 when he sold the gas station in 1995.
3. Whether Petitioner Paid $99,000 for Improvements
Petitioner testified and contends that, in 1994, he
purchased about $99,000 in improvements, including a gas
dispenser pump, underground piping, and equipment to monitor
leaks. We decide whether a witness is credible on the basis of
objective facts, the reasonableness of the testimony, and the
demeanor and consistency of statements made by the witness.
Quock Ting v. United States, 140 U.S. 417, 420-421 (1891); Wood
v. Commissioner, 338 F.2d 602, 605 (9th Cir. 1964), affg. 41 T.C.
593 (1964); Pinder v. United States, 330 F.2d 119, 124-125 (5th
Cir. 1964); Concord Consumers Hous. Coop. v. Commissioner, 89
T.C. 105, 124 n. 21 (1987). We are not persuaded by petitioner’s
testimony for several reasons. First, petitioner did not claim
any depreciation related to improvements for the Chevron gas
station business on his and his spouse’s 1994 income tax return.
However, petitioner and his wife knew about depreciation
deductions because they claimed depreciation deductions for
rental real estate on their 1994 return. Second, petitioner
offered no documentary evidence or other corroboration that he
3 We treat petitioner as bearing the burden of proof
because the record does not show that the examination commenced
after July 22, 1998, and petitioner does not contend and has
offered no evidence that sec. 7491(a) applies in this case.
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