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incomplete. The documentary evidence on which petitioners rely
includes certain checks payable to F&M Bank and certain F&M Bank
statements. We found that evidence to be credible.
December 2, 1999 Transaction
It was petitioners’ position at the time they filed their
1999 return that the December 2, 1999 transaction did not consti-
tute a sale of lot 5 when it occurred. Consequently, they did
not report that transaction as a sale in that return. Petition-
ers maintained at trial, and continue to maintain on brief, the
same position that they took in their 1999 return. However,
petitioners argued at trial, and continue to argue on brief,
that, because of events occurring in years after the December 2,
1999 transaction, that transaction became a sale of lot 5 in
1999, but for $200,000 and not for $318,000 as reflected in the
December 2, 1999 settlement statement.
We address first petitioners’ position that the December 2,
1999 transaction did not constitute a sale of lot 5 when it
occurred. According to petitioners, the record establishes that
that transaction was some type of venture with respect to lot 5
between Mr. O’Malley and Kevin O’Malley (alleged venture).
Petitioners contend that, pursuant to that alleged venture,
(1) at the time of the December 2, 1999 transaction, Kevin O’Mal-
ley was to (a) borrow $254,400 from F&M Bank and secure that loan
with lot 5, (b) contribute $200,000 of the proceeds of the
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