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disregard." Sec. 6662(b). A taxpayer has the burden of proving
that the Commissioner's determination of an addition to tax is in
error. Luman v. Commissioner, 79 T.C. 846, 860-861 (1982).
The accuracy-related penalty of section 6662 does not apply
to any portion of an underpayment if there was reasonable cause
for such portion and the taxpayer acted in good faith. Sec.
6664(c)(1). The most important factor is the extent of the
taxpayer's efforts to assess his proper tax liability for the
year. Sec. 1.6664-4(b)(1), Income Tax Regs. Such a
determination is made by taking into account all facts and
circumstances, including the experience, knowledge, and education
of the taxpayer. Id. Reliance by the taxpayer on the advice of
a qualified adviser will constitute reasonable cause and good
faith if, under all of the facts and circumstances, such reliance
was reasonable and the taxpayer acted in good faith. Id.
On their 1989 Federal income tax return, petitioners
reported no gain from the sale on 20 The Point, rolling over a
gain of $341,710. Later, petitioners agreed to the revenue
agent's recalculation of gain to be $503,250.
Petitioners assert that they believed they were entitled to
the benefits of section 1034; yet they presented little evidence
to support their belief. Petitioners argue that their actions in
establishing 20 The Point as their principal residence and making
the subsequent sale were in "ignorance" of the existence of the
Internal Revenue Code provisions.
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