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were consistent with California's homeowners' exemption
procedures.
In regard to the driver's license and the voter
registrations, petitioners acquired 20 The Point on August 31,
1988, and within 3 months they had purchased 15 Sandpiper.
Because of the short time involved, we do not consider it
significant that 20 The Point was not listed on either
petitioners’ driver's licenses or voter registrations.
Conclusion
After considering the record as a whole, and on balance, we
find that 20 The Point was not petitioners' principal residence
during the relevant period. In our judgment, their principal
residence was Mary Street. Therefore, we sustain respondent's
determination that section 1034 is inapplicable and hold that
petitioners must recognize the gain on the sale of 20 The Point
in 1989.
Issue 2. Accuracy-Related Penalty
Respondent determined an accuracy-related penalty pursuant
to section 6662(a) for petitioners' 1989 tax year. Section 6662
imposes a penalty equal to 20 percent of the portion of an
underpayment of tax that is attributable to "negligence or
disregard of rules or regulations." Sec. 6662(a) and (b)(1).
The term "negligence" includes "any failure to make a reasonable
attempt to comply with the provisions of this title," and the
term "disregard" includes "any careless, reckless, or intentional
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