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over the age of 55, the property was not their principal
residence; petitioners are thus ineligible for the section 121
exclusion5 and must recognize their gain.
Issue 2. Addition to Tax Under Section 6651(a)(1)
Respondent determined that petitioners are liable for an
addition to tax under section 6651(a)(1). Section 6651(a)(1)
provides for an addition to tax for failure to timely file.
However, the addition is not applicable if "it is shown that such
failure is due to reasonable cause and not due to willful
neglect." Sec. 6651(a)(1). Petitioners have the burden of
proving such failure was due to reasonable cause. Rule 142(a);
United States v. Boyle, 469 U.S. 241, 245 (1985). The amount of
the addition is 5 percent for each month or fraction of a month
for which the return is delinquent, not to exceed 25 percent in
the aggregate. Sec. 6651(a)(1). Calendar year individual
taxpayers must file their Federal income tax return by April 15,
5 Sec. 121(a) provides, in pertinent part, as follows:
(a) General Rule--At the election of the taxpayer, gross
income does not include gain from the sale or exchange of
property if--
(1) the taxpayer has attained the age of 55 before the
date of such sale or exchange, and
(2) during the 5-year period ending on the date of the
sale or exchange, such property has been owned and used by
the taxpayer as his principal residence for periods
aggregating 3 years or more.
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