Carl E. Jones and Elaine Y. Jones - Page 3

            dividends of $314,504, $27,298, and $116,163 in 1989, 1990, and                           
            1991, respectively, from INI.  We hold petitioner received                                
            distributions from INI the character and amounts of which are set                         
            out below.  (5) Whether petitioners realized a $28,248 loss from                          
            a nonbusiness bad debt in 1991.  We hold they did not.  (6)                               
            Whether petitioners are liable for an accuracy-related penalty                            
            pursuant to section 6662 for 1989, 1990, and 1991.  We hold they                          
            are.  (7) Whether Mrs. Jones qualifies as an innocent spouse                              
            under section 6013(e) for 1989, 1990, and 1991.  We hold she does                         
                  Some of the facts have been stipulated and are so found.                            
            The stipulated facts and the accompanying exhibits are                                    
            incorporated into our findings by this reference.  At the time                            
            the petition in this case was filed, petitioners resided in                               
            Atlanta, Georgia.                                                                         

            2  Respondent determined that for the years at issue certain                              
            computational adjustments should be made, which would: (1)                                
            Preclude petitioners from taking a deduction for medical and                              
            dental expenses, (2) reduce petitioners' itemized deductions, (3)                         
            disallow petitioners' deduction for exemptions, and (4) preclude                          
            petitioners from claiming the Earned Income Credit.  These are                            
            mathematical adjustments that the parties can make in their Rule                          
            155 computation.                                                                          
                  In addition, in the notice of deficiency respondent                                 
            disallowed petitioners' claimed loss of $5,700 from the sale by                           
            Development of certain business property and determined that                              
            petitioners had a gain of $8,921 from that sale.  Respondent's                            
            determination is presumed correct, and petitioners bear the                               
            burden of proving otherwise.  Rule 142(a); Welch v. Helvering,                            
            290 U.S. 111 (1933).  Petitioners did not address this issue at                           
            trial or on brief; thus, petitioners have failed to meet their                            
            burden of proof.  Accordingly, respondent is sustained on this                            

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