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the record, such as matching the checks to petitioner’s monthly
mortgage payment on his residence or to payments, such as for
marine architectural services, that had already been incorporated
in respondent’s determination of petitioner’s basis. The
remaining checks that could not be excluded on the foregoing
basis were treated as possible payments for capital improvements
to the vessels.
On the basis of this methodology, respondent concluded that
petitioner could not have expended more than $46,507 for capital
improvements to the Sir Winston from the four checking accounts
he held during the 1-year period following the vessel’s
acquisition.20 Upon careful review, we are convinced that
respondent’s methodology is reasonable.21 Petitioner has not
20 This is the total from respondent’s description of his
analysis of the four checking accounts in the requested findings
of fact in his brief. Elsewhere in the text of his brief, he
omits the checks from one account at the First Indiana Bank,
totaling $2,543. By using the total from respondent’s requested
fact findings, we have resolved any ambiguity in petitioner’s
favor.
21 In his analysis of petitioner’s SunTrust Bank checking
account, respondent did not consider checks for less than $800,
based on the fact that petitioner’s capital improvements to the
vessels that had been substantiated were virtually always in
excess of that figure. We are persuaded that this methodological
assumption was reasonable in the circumstances. In any event,
even if all checks under $800 were treated as expended for
capital improvements, there would still be substantial amounts of
claimed basis in the Sir Winston and Sir Winston II unaccounted
for, because the totals of the checks written for less than $800
during the 1-year periods after the acquisition of the Sir
Winston and Sir Winston II were $86,010 and $98,278,
(continued...)
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