- 7 -
taxable under section 61(a)(3). Ultimately, we agree with
respondent.
Petitioner bears the burden of proof on this issue. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933); Freytag v.
Commissioner, 904 F.2d 1011, 1017 (5th Cir. 1990), affg. 89 T.C.
849 (1987), affd. 501 U.S. 868 (1991). For the first time on
brief, respondent increased Briarpark's amount realized by
$485,973, decreased its adjusted basis by $555,512, and deducted
its selling expenses of $554,901, thereby increasing Briarpark's
gains derived from dealings in property by $486,584.4 These
modifications result in an increased deficiency and are new
matters under Rule 142. See Cox v. Commissioner, T.C. Memo.
1982-667. Respondent did not assert an increased deficiency in
his answer. Additionally, respondent did not move to conform the
4In the notice of deficiency, respondent calculated the gain
derived from dealings in property as follows:
Amount realized $25,582,181
Less adjusted basis (11,661,245)
Gain 13,920,936
==========
On opening brief, respondent calculated the amount realized
and the resulting gain as follows:
Cash proceeds from Dan Associates $11,600,000
Debt discharged as a result of the sale 14,468,154
Total amount realized 26,068,154
Less adjusted basis (11,105,733)
Less selling expenses (554,901)
Gain 14,407,520
==========
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