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authorities, as was done, to support her position that the return
was invalid because she was signing under duress. At the times
her accountant signed the requests to extend the times for filing
her 1989 return, the 1988 return was under audit by the Internal
Revenue Service. On September 13, 1990, the revenue agent issued
a report taking the position that a substantial part of the Phase
II deposits was taxable on the 1988 return. Her 1989 return, as
filed on October 12, 1990, pursuant to the extensions, took the
position, obviously with the return preparer's advice, that there
was no tax due. This appears to have been due to the combination
of three mistaken positions: First, that she had a net loss of
$4,101 from Woodbine operations because the bulk of the gross
income had been taxable in the prior year, in accordance with the
revenue agent's recently issued report; second, the even more
aggressive position she has been taking in this proceeding, that
she was not taxable on any part of the 1989 Woodbine operating
income because Howard Berger owned the Woodbine business in its
entirety; and third, that she had no gain on the sale to the
Kunkowskis because the attribution of the sale to Howard Berger
under either or both of the "on behalf of" and step-transaction
approaches under section 1041 gave her a basis in Woodbine equal
to the amount realized of $680,000. Although we have concluded
otherwise on the merits, we believe that there was a reasonable
basis for Alice Berger's 1989 return positions, and for her
failures to pay tax with her extension applications. We reject
respondent's imposition of the section 6651(a) addition to tax.
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