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will. Under section 1014, the correct basis in these shares is
$10.125 per share. See sec. 1014(a). Therefore, we sustain
respondent's determination.4
Addition to Tax for Failure to File a Timely Return
Petitioners filed a delinquent return for the 1985 taxable
year, and respondent determined that they are liable for an
addition to tax under section 6651(a)(1). Petitioners bear the
burden of proof on this issue. Abramo v. Commissioner, 78 T.C.
154, 163 (1982). Petitioners did not address this issue on
brief, nor is there any evidence in the record that would lead us
to conclude that petitioners had a reasonable excuse for not
filing their 1985 return until April 20, 1987. See sec.
6651(a)(1). Thus, we sustain respondent's determination.
4We note that these stock sales were not reported on
petitioners' 1985 return and that Louis R. DePretis, who prepared
petitioners' 1985 return, testified that petitioners initially
concealed their stock transactions for 1985. Mr. DePretis
testified that "Mr. Fritz had [originally] indicated that there
were no stock transactions during these years that were being
audited. I had asked [respondent's revenue agent] Mr. Torri
after the meeting if he had evidence to the contrary and he said
he did in fact." Mr. DePretis continued: "I therefore then got
back ahold[sic] of the Fritzes * * *. Mrs. Fritz or Mr. Fritz
handed me a transaction that showed they sold 200 shares of
Columbia Gas as being the only transaction for 1985." Mr.
DePretis testified that this sale of 200 shares of Columbia Gas
produced a capital gain of $1,200. Mr. DePretis thought that the
Columbia Gas transaction was petitioners' sole transaction for
1985 because petitioners presented to Mr. DePretis a statement
dated Dec. 31, 1985; however, it only contained transactions from
the month of December.
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