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Moreover, even if the payment from Sanrio could have been
characterized as a capital gain rather than ordinary income,
section 441 requires a taxpayer to report taxable income on the
basis of a taxable year. Petitioners had an obligation to report
the $840,000 on their 1990 return, not in the future when they
might possibly realize a capital loss. Petitioners surely
recognized that duty in light of their relative sophistication in
tax matters; they were aware that their capital losses could be
carried forward and that they could have received a refund.
Furthermore, Susanna held a bachelor's degree in accounting. Cf.
Laurins v. Commissioner, 889 F.2d at 913 (the fact that a
taxpayer is sophisticated in tax matters may permit an inference
of intent to defraud when he willfully underpays his taxes).
Finally, there is no evidence in the record before us that
petitioners realized their losses in Regent at any time from 1990
until the date of trial. Petitioner himself stated that he did
not know when, if ever, the losses from Regent would be realized.
This indicates to us that, had petitioners not been audited, the
$840,000 income would never have been disclosed.
Petitioner's claim that the omission of Susanna's $150,000
consultation fee was inadvertent also rings false. Susanna had
engaged in only a handful of transactions that year, and she
testified that petitioner was aware of her transactions and of
the consultation fee. Moreover, petitioner wrote a check to
Susanna drawn on the Bank of America account for that exact
amount on the same day the consultation fee was deposited in that
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