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from the property held in cotenancy, even though he paid the full
amount of such expenses.5
Additions to Tax--Substantial Understatement
Section 6661(a) provides that if there is a substantial
understatement of income tax for any taxable year, there shall be
added to the tax an amount equal to 25 percent of the amount of
any underpayment attributable to such understatement. Pallottini
v. Commissioner, 90 T.C. 498 (1988). The amount of the
understatement is equal to the excess of the amount of tax
required to be shown on the return for the tax year, less the
amount of the tax shown on the return. Woods v. Commissioner, 91
T.C. 88, 94 (1988). An understatement is substantial if it
exceeds the greater of 10 percent of the tax required to be shown
on the return for the taxable year, or $5,000. Sec. 6661(b)(1).
Petitioner has not shown that he comes within any exception
to section 6661. If, under a Rule 155 computation, the
recomputed deficiency satisfies the statutory percentage or
amount, petitioner will be liable for this addition to tax.
To reflect the foregoing,
5
Petitioner's satisfaction of the full amount of the expenses
associated with the cotenancy properties no doubt conferred a
benefit on his cotenants in the nature of either income, a loan,
repayment of a loan, or a gift. See Old Colony Trust Co. v.
Commissioner, 279 U.S. 716 (1929); Rev. Rul. 62-39, 1962-1 C.B.
17. However, the record is void of any evidence that would
enable us to decide which of the above classifications pertains
to the case before us, nor is such a decision necessary.
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