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unreported gross income (we calculate) of $13,711,471.
Petitioner acknowledges that he did not report gain from the
disposition of either the 1987 Ampel notes or the Holland Spring
notes on the 1989 return, but petitioner argues that, even if he
were required to report those gains (which petitioner says he was
not), the omitted gains do not exceed $96,288.
Section 61(a)(3) includes in gross income: “Gains derived
from dealings in property”. Section 1001(a) specifies that gain
from the sale or other disposition of property is the excess of
the amount realized therefrom over the taxpayer’s adjusted basis
in the property. Section 1001(b) provides, as a general rule,
that the amount realized from the sale or other disposition of
property is the sum of any money received plus the fair market
value of the property (other than money) received. Section 1011
specifies the taxpayer’s adjusted basis in property. Section
453B deals specifically with gain or loss on the sale or other
disposition of an installment obligation. The parties are in
agreement that petitioner’s adjusted bases in the 1987 Ampel
notes and the Holland Spring notes were $6,940,865 and
$2,724,451, respectively. Their disagreement is with respect
to the amount realized on each sale.
The parties are in further agreement that, in determining
the amount realized on each sale, some portion of the
consideration received by petitioner is allocable to accrued
interest and is not part of the amount realized on each sale.
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