13
discussion reflects, the decided cases have rejected the position
maintained by petitioner herein.
Petitioners also argue that they adequately disclosed the
relevant facts relating to the transactions on their return. Two
types of disclosure are provided for: (1) Disclosure in
statements attached to the return, sec. 1.6661-4(b), Income Tax
Regs., and (2) disclosure on the return, sec. 1.6661-4(c), Income
Tax Regs. Petitioners did not attach any statement to their
return; therefore, section 1.6661-4(b), Income Tax Regs., is not
applicable.
Taxpayers can meet the requirements of adequate disclosure
by providing on the return sufficient information to enable
respondent to identify the potential controversy involved. Crown
Income Charitable Fund v. Commissioner, 98 T.C. 327, 340 (1992),
affd. 8 F.3d 571 (7th Cir. 1993); Schirmer v. Commissioner, supra
at 285-286. Petitioners did not indicate anywhere on their
return for 1987 that they had entered into the assumption
agreement or the nature of the underlying indebtedness.
Petitioners simply reported the losses of ABDC and the income of
GCC. This, without more, does not amount to sufficient
information to meet the adequate disclosure standard. See
Schirmer v. Commissioner, supra at 286.7
7 See also Wilson v. Commissioner, T.C. Memo. 1991-544, where we
sustained respondent's determination under sec. 6661 on the basis
of lack of disclosure and lack of substantial authority.
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