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destroy the Solomons house as part of the overall development
plan.
Solomons treated the Solomons house at all times as
partnership property, pledging it, along with other partnership
property, as collateral for loans. Petitioner's claim that he
gained title, equitable or otherwise, in the Solomons house is
contrary to the evidence. Respondent's determination that
petitioner is not entitled to exclude gain under section 121 or
to defer gain under section 1034 in 1989 will be sustained.
Section 6661 Addition to Tax
Respondent determined that petitioner is liable for the
section 6661 addition to tax for 1988. Petitioner bears the
burden of proving that respondent’s determination is not correct.
Rule 142(a); Cluck v. Commissioner, 105 T.C. 324, 339 (1995).
Section 6661(a) provides for an addition to tax on underpayments
attributable to a substantial understatement of income tax.
Section 6661(b)(2)(A) defines the term “understatement” as being
the excess of the amount of tax required to be shown on the
return for the taxable year over the amount shown on the return.
An understatement is substantial if it exceeds the greater of
10 percent of the tax required to be shown on the return or
$5,000. Sec. 6661(b)(1)(A). The deficiency resulting from our
determinations is a substantial understatement.
The section 6661 addition to tax is not applicable, however,
if there was substantial authority for the taxpayer's treatment
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