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petitioner’s methodology were reasonable, the invoices that
petitioner proffered to substantiate the costs he claims to have
incurred in connection with the construction of the later-built
yachts were repeatedly shown to have dates that preceded the
commencement of construction of the yacht whose costs they
purportedly substantiated. Even more egregious were repeated
instances where invoices’ dates had been crudely altered in an
effort to make the invoices appear to have been created within
the time period that the yacht whose costs they purported to
substantiate was built. In sum, petitioner’s effort to invoke
the Cohan rule to substantiate his claimed basis in the three
yachts is wholly unreliable, and we reject it.
Because petitioner has failed to substantiate any basis in
the three yachts beyond that determined by respondent, we sustain
respondent’s determination that petitioner had unreported gain
from the sale of yachts of $155,848, $527,074, and $615,119 in
1994, 1996, and 1997, respectively.
Gain From Sale of Real Property
In 1995, petitioner sold real property at 6729 Westfield
Boulevard, Indianapolis, that he leased to the Winston Yacht and
Country Club, Inc. Petitioner reported an adjusted basis in the
Westfield Boulevard property at the time of sale of $1,045,742,
which included capital improvements of $232,400. Respondent
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