Frank H. and Marla C. Black - Page 10

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               On December 31, 1992, petitioners had cash on hand of                  
          approximately $60,000 and did not possess cash on hand in any               
          significantly greater amount.2                                              
               Petitioners were not mistrustful of banks, and they                    
          maintained several bank accounts and engaged in large numbers of            
          banking transactions during both 1991 and 1992.  Petitioners’ use           
          of bank accounts included the unusual practice of depositing and            
          writing numerous checks for small amounts.  During 1991 and 1992,           
          petitioners deposited 22 checks ranging from $0.63 to $23.47, and           
          also wrote 38 checks ranging from $2 to $9.93.                              
               Mr. Black knew that bank deposits are insured by the Federal           
          Deposit Insurance Corporation and that he could have earned                 
          considerable sums of interest income, with no risk, if he had               
          deposited the alleged cash hoard into a bank account.                       
               Petitioners borrowed money and paid interest on loans during           
          not only 1991 and 1992, but also during prior years when they               
          allegedly were accumulating their cash hoard.  Petitioners                  
          claimed and respondent allowed, Schedule A, Itemized Deductions,            
          mortgage interest deductions for each of the taxable years 1987             
          through 1992.                                                               
               Mr. Black borrowed $9,000 from his office manager, Jeanette            
          Roberts, and repaid her during the same year that the loan was              

               2The parties stipulated these facts.                                   

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