William C. Reichenbach - Page 6

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          property,4 and distributions from qualified retirement plans5               
          were includable in petitioner's gross income for the years in               
          issue, and that the distributions from qualified retirement plans           
          were subject to additional tax under section 72(t).  Petitioner             
          presented neither evidence nor argument that showed error in                
          respondent's determinations.  Consequently, with the one                    
          modification to reflect respondent's concession as to                       
          petitioner's increased basis in the property sold, we sustain the           
          deficiencies determined by respondent.                                      
          II.  Section 6651 -- Failure To File                                        
               Respondent determined that petitioner is liable for                    
          additions to tax under section 6651(a)(1).  Section 6651(a)(1)              
          imposes an addition to tax for failure to file a return timely              
          unless the taxpayer shows that the failure was due to reasonable            
          cause and not willful neglect.  See Kotmair v. Commissioner,                
          86 T.C. 1253, 1263 (1986).  A failure to file timely is due to              
          reasonable cause if the taxpayer exercised ordinary business care           
          and prudence and, nevertheless, was unable to file the return               

               4  At trial, petitioner testified that he had an additional            
          $21,000 basis in the property due to a corresponding payment made           
          to his ex-wife as part of their divorce settlement.  Petitioner             
          submitted no documentation or additional evidence in support of             
          his claim, and we do not find his testimony credible.  Therefore,           
          petitioner realized gain in the amount of $64,400, and because              
          petitioner has failed to show any exemption from the recognition            
          of that gain, it is fully includable in his gross income for                
          1993.  See secs. 61(a)(3), 1034, 1221.                                      
               5  See secs. 72, 402(a), 408(d)(1).                                    

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