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defer the recognition of the gain from the sale of the Roslyn
residence, rather than choosing to offset that gain by his 1986
net trading loss. About 18 months before the IRS revenue agent
orally informed Mr. Gordon in October 1988 that his 1986 net
trading loss was properly reported as an ordinary loss in the
1986 return, the Gordons indicated in the Form 2119 included as
part of their 1986 return that they planned to replace the Roslyn
residence within the "replacement period". Furthermore, only a
few weeks after that agent so informed Mr. Gordon, the Gordons
consummated the purchase of the Lincoln Plaza residence.
On the record before us, we find that Mr. Gordon has failed
to show that, under the facts and circumstances presented here,
the doctrine of equitable estoppel should be applied against
respondent. Accordingly, on that record, we find that respondent
is not equitably estopped from claiming that petitioners are not
entitled to the claimed 1988 NOL deduction because Mr. Gordon's
1986 net trading loss constitutes a capital, and not an ordinary,
loss.
Innocent Spouse
Ms. Gordon claims that she qualifies for innocent spouse
relief under section 6013(e)(1) with respect to the portion of
the understatement of tax for 1988 that is attributable to the
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