Arun and Asmita Bhatia - Page 13

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          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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