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accounting books, records, invoices, and bank records related to
the medical equipment business, documentation related to the
purchase of the medical equipment, depreciation schedules for the
medical equipment, canceled checks verifying petitioner’s initial
investment and additional capital contributions to KCP, loan
agreements relating to KCP, and books and records of KCP used to
compute petitioner’s basis in KCP. Petitioner did not provide
the requested documents.
On February 10, 2006, respondent filed a motion seeking an
order to compel production of documents. On February 23, 2006,
the Court ordered petitioner to “on or before March 10, 2006,
produce to counsel for respondent, for inspection and copying,
each and every document requested in respondent’s request for
production of documents”.
In response, to substantiate his basis in KCP, petitioner
produced a one-page typed statement of his KCP capital account
titled “Karason Family Investment Club Capital Account - JCK”.
The typed statement contradicted the handwritten statement
petitioner had provided during the audit. The typed statement
indicated that he had a 2001 capital balance of $81,806 and
contributed $18,500 to KCP in 2001. The typed statement also
indicated he made capital contributions every year from 1986
through 2001 and incurred $31,552 of partnership losses in 2001.
No supporting documentation was provided to substantiate these
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Last modified: November 10, 2007