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II. Additions to Tax
A. Parkers
Respondent determined additions to tax under sections
6653(a)(1) and (2) and 6661 against the Parkers. We have granted
partial summary judgment in favor of the Parkers with respect to
one aspect of the deficiency in tax determined against them for
1985, and we have here determined that no gain is recognized to
the Parkers on account of the $2 million notes. We believe that
we have thus resolved favorably to the Parkers all assignments of
error as to deficiencies raised by them in the petition and that,
as a result, we must redetermine a deficiency of zero for 1985.
We are somewhat confused, however, by one item, in the amount of
$1,600,000, described in the stipulation of settled issues as
"cancellation of debt income", and added to respondent's
determination of unreported long-term capital gain. In
respondent's brief, that $1,600,000 item is described as long-
term capital gain reported by the Parkers "from the sale of the
joint venture interest". It is further described as an
adjustment respondent was unable to take into consideration in
the notice of deficiency mailed to the Parkers. Whatever that
item is, and if it gives rise to any increased deficiency (which
we doubt), respondent has failed to carry her burden of proof as
to any necessary facts, and we shall treat respondent as having
abandoned any basis for a deficiency other than those that we
have dealt with here or in our order disposing of the Parkers’
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