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Whether petitioners are entitled to defer, as a like-kind
exchange, the income realized on the sale of their liquor store;
(2) whether petitioners are liable for the addition to tax for
failure to make estimated income tax payments; and (3) whether
petitioners are liable for the addition to tax for substantial
understatement of income tax.
FINDINGS OF FACT
Petitioners, at all pertinent times, were married, and they
resided in Westminster, California, at the time their petition in
this case was filed. Julius and Hanan Dibsy (petitioners) have
been in the business of owning and operating liquor stores. On
January 17, 1986, petitioners purchased a liquor store in
Huntington Beach, California, from William D. Hanshaw (Hanshaw).
Petitioners changed the name of the store from "Hoovs Hut Liquor
#4" to "Sunshine Liquor". Petitioners paid $210,000 for the
noninventory assets of Sunshine Liquor.
During 1988, petitioners entered into discussions with
Hanshaw about obtaining a store with a larger volume of sales.
Petitioners learned that Hanshaw might sell "Bayshore Liquor", a
liquor store located in Seal Beach, California. Consequently,
petitioners immediately listed Sunshine Liquor for sale. On or
about March 23, 1988, they entered into an agreement to sell the
noninventory assets of Sunshine Liquor to Sathit and Supin
Sathavoran. On March 31, 1988, petitioners agreed to purchase
Bayshore Liquor from Hanshaw, and they gave him $10,000 in
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