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that petitioner owned and sold the property. Having had the
advantages of ownership of the Paddock Lane property, we find it
inapposite for petitioner to deny the form of the transaction.
We hold, in accord with California law, that petitioner was the
sole owner of the Paddock Lane property at the time of its sale.
We next consider whether petitioner is liable for the
accuracy-related penalty for substantially understating her
income tax. Sec. 6662(b)(2). A substantial understatement is
one that exceeds the greater of 10 percent of the tax required to
be shown or $5,000 (in the case of an individual taxpayer). Sec.
6662(d)(1). Any understatement is to be reduced by an item for
which there is substantial authority for its tax treatment or
adequate disclosure.
Petitioner's failure to report the entire gain from the sale
of the Paddock Lane property resulted in a $150,027 understate-
ment of income tax. This amount is in excess of $5,000, and it
exceeds 10 percent of the amount of tax required to be shown on
the return. Petitioner has failed to show substantial authority
in support of her position that the Paddock Lane property should
be deemed community property and that the gain should be divided
between petitioner and her ex-husband.
Section 6662(d)(2)(B)(ii) defines a disclosed item as one as
to which "the relevant facts affecting the item's tax treatment
are adequately disclosed in the return or in a statement attached
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