-16-
however. Petitioners have failed to prove the portion of
deposits in Mrs. Paterson’s separate bank accounts that were
attributable to Mr. Paterson’s bookmaking activities. Absent any
documentary evidence, we decline to speculate as to the extent of
any double counting of income. Moreover, respondent’s profit
factor method used to determine Mr. Paterson’s income may
underestimate Mr. Paterson’s income. We note that one of the 4
days used in the method was just a partial day, and none of the
days used in the method was a Saturday, a high-volume day. Thus,
any potential double counting of income may be offset by
underestimating some of Mr. Paterson’s income, and we shall not
speculate further.
Second, petitioners argue that some of the deposits Mrs.
Paterson made into her bank accounts during the years at issue
are nontaxable or are loans. Petitioners argue that these
deposits include a $160,000 gain on the sale of stock, insurance
reimbursement for stolen jewelry, a $50,000 loan, and $6,900 of
gain on the sale of other stock.7 Petitioners have introduced no
documentary evidence to support their claims and rely only on
their uncorroborated, self-serving testimony, which we are not
required to accept and which we do not find to be credible. See
7Petitioners argue on brief that the amounts representing
gain on the sale of stock are nontaxable. We surmise that
petitioners mean that the deposits in Mrs. Paterson’s account are
the proceeds of stock sales and she should be taxed only to the
extent the proceeds exceed her basis. There is no evidence that
after the stock sales, cash was transferred from Mrs. Paterson’s
securities account into her bank account. Instead, proceeds from
securities transactions remained in the securities account to be
reinvested.
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