Winston Knauss - Page 20

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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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