3
excess of the expenses allowed by respondent; (7) whether
petitioners failed to report capital gain in the amount of
$17,826 for 1989; and (8) whether petitioners are liable for an
accuracy-related penalty under section 6662(b)(1) for 1990. For
the purpose of clarity, the facts and legal analysis of each
issue will be combined.
Some of the facts have been stipulated and are so found.
The stipulation of facts and attached exhibits are incorporated
by this reference. At the time the petition in this case was
filed, petitioner James E. Copley resided in Charleston, West
Virginia, and petitioner Cynthia R. Copley resided in Treasure
Island, Florida. References to petitioner are to James E.
Copley.
Issue 1. IRA Distribution
During 1989 and 1990, petitioner was employed by the U.S.
Department of Energy (DOE) in Morgantown, West Virginia, as a
project manager. In or around July 1990, petitioner left the DOE
allegedly on account of "whistle-blowing" activities. At the
time of his departure, petitioner was entitled to a gross
distribution from the CSRS of $18,446.72. On August 13, 1990,
petitioner directed that these funds be rolled over into a
Fidelity IRA. For this transaction, Fidelity charged a
commission of 3 percent of the amount deposited.
On August 20, 1990, the market value of the stock purchased
by Fidelity for petitioner's IRA account totaled $17,893.10. On
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