Earle E. Murphy - Page 9

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            Extension of Time to File U.S. Individual Income Tax Return) with                          
            respect to the taxable year 1988, which automatically extended                             
            petitioner's filing deadline until August 15, 1989.  Petitioner                            
            did not mail the return until September 2, 1989.  Petitioner's                             
            original individual income tax return for 1988 reported                                    
            petitioner's receipt of these liquidating distributions.                                   
            Petitioner's stock bases, as reported by him on his Schedule D                             
            for 1988, were $6,225 in FSRC and $1,000 in DHF.  Petitioner also                          
            reported $97 in interest income on his original return.  Neither                           
            FSRC nor DHF reported any interest income on their 1988 income                             
            tax returns.  The Internal Revenue Service's records indicate,                             
            however, that petitioner received several Forms 1099-INT, which                            
            state that he received interest income in the total amount of                              
            $13,467.6                                                                                  
                  On March 5, 1991, petitioner filed an amended return for the                         
            1988 taxable year.  On his amended return, petitioner reported                             
            total income in the amount of $41,570.  This amount reflects                               
            $30,000 in business income and two items petitioner reported on                            
            his original return:  (1) $97 of interest income, and (2) $11,473                          



            6The $13,467 figure represents the $97 that petitioner                                     
            reported on his income tax return, plus the $13,370 interest                               
            determined to be income to petitioner in the statutory notice of                           
            deficiency.  Paragraph 6 of the stipulation of facts incorrectly                           
            states that the Service's records reflect a total interest figure                          
            of $13,346.  Petitioner did not object to the correction of this                           
            error.                                                                                     




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