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Petitioners reported no gain from the sale on their Fort
Lauderdale property on their 1990 return. They assert that they
believed they were entitled to the benefits of sections 121 and
1034. However, petitioners' sole basis for believing their gain
was nontaxable was a single paragraph contained in a homeowners'
brochure. Their reliance upon the single paragraph was
unreasonable. They disregarded the rest of the article, which
discussed the qualifications for obtaining nonrecognition
treatment of gain on home sales. Petitioners clearly took the
paragraph out of context and presented no further evidence to
justify their belief.
Based on the record as a whole, we conclude that petitioners
have not carried their burden of proving that they acted with
reasonable cause. We hold that petitioners are liable for the
accuracy-related penalty under section 6662(a).
To reflect the foregoing and respondent's concessions,
Decision will be entered
under Rule 155.
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