William O. Harrison - Page 17

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             of a total tax of $38,702, less Federal income tax withheld              
             of $2,374, plus a penalty for the underpayment of estimated              
             tax of $2,438, and a penalty and interest for late payment               
             in the aggregate amount of $3,149.                                       
                  On the Schedule C, Profit or Loss From Business, filed              
             with their return, petitioners reported a net loss of                    
             $208,542 from Mr. Harrison's law practice in Corpus                      
             Christi.  They reported gross income of $28 and total                    
             expenses of $208,570 from this business, including                       
             depreciation of $3,319.  Included among the assets on which              
             depreciation is claimed are expenditures during 1989 for                 
             furniture in the aggregate amount of $17,982 and leasehold               
             improvements of $64,199.  On a Form 6252, Installment Sale               
             Income, filed with their return, petitioners reported that               
             they had received $552,218 from the sale of Mr. Harrison's               
             interest in the Houston firm, of which 94.77 percent or                  
             $523,337 was long-term capital gain from an installment                  
             sale.                                                                    

             Petitioners' Joint Return for 1990                                       
                  In April 1991, petitioners' accountant filed, on their              
             behalf, a Form 4868, requesting an automatic extension of                
             time to file petitioners' 1990 return.  The Form 4868                    








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