Chad A. and Katherine J. Lincoln - Page 12

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          periodicals.  Booth v. Commissioner, 108 T.C. 524, 578 (1997);              
          sec. 1.6662-4(d)(3)(iii), Income Tax Regs.                                  
               Petitioners’ position is not supported by any well-reasoned            
          construction of the relevant statutory provisions.  There is no             
          substantial authority for their position that the purchase of the           
          Big Sur property and the subsequent sale of their Pacific Grove             
          property constituted an exchange.  The cases petitioners have               
          cited on brief are readily distinguishable and to the extent they           
          are pertinent, undermine their position.  Similarly, there is no            
          substantial authority for petitioners’ treatment of the                     
          reallocated items.                                                          
               Accordingly, we sustain respondent’s imposition of the                 
          accuracy-related penalty.                                                   
               To reflect the foregoing,                                              
                                             Decision will be entered for             

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