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understatement, for purposes of section 6661, is to be reduced by
the portion attributable to any item for which there was
substantial authority or any item which was adequately disclosed.
Sec. 6661(b)(2)(B).
Petitioner, on brief, made scant reference to section 6661.
He argues that he believed that he had no tax liability and/or
that he relied on his accountant on the section 1031 transaction,
which he believed to be adequately disclosed. As to petitioner's
first position that he believed that he had no tax liability, we
have difficulty reconciling that position with the record.
Concerning the possibility of an adequate disclosure,
petitioner singles out the section 1031 transaction. Curiously,
respondent did not determine an addition to tax under section
6661 for the 1989 taxable year, the one in which the section 1031
transactions were disclosed.
Accordingly, we find that, for the taxable years 1985
through 1988, petitioner did not show error regarding
respondent's determination that section 6661 is applicable, and
we sustain the additions to tax under that section for each such
year in which the understatement of tax, as recomputed pursuant
to our opinion, exceeds the threshold amount of section
6661(b)(1).
To reflect the foregoing and considering concessions of the
parties,
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