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rather, were incorrectly reported as $14,067 in rental income in
petitioners' amended tax return.14
In general, section 61(a)(3) requires gains derived from the
sale of property to be included in gross income. Petitioners
failed to prove that they reported the $11,667 by incorrectly
including it in the $14,067 reported as rental income on their
amended return. Other than Mr. King's testimony that he made a
mistake, petitioners offered no evidence or explanation for the
difference in the amount realized from the newsstand sale during
1994 and the amount included under rental income. Petitioners
offered no evidence that they had a basis in the newsstand other
than zero. Therefore, we uphold respondent's determination that
petitioners had additional gross income of $11,667.15
Petitioners stipulated that they received $160 of interest
income from Mellon Bank and $67 of interest income from PNC Bank
during the taxable year 1994. Since these amounts were not
reported on their 1994 amended return, we sustain respondent's
adjustment increasing petitioners' income by these amounts.
14Petitioners did not report any rental income in their
original income tax return.
15Petitioners do not argue, nor do they provide sufficient
facts to establish, that the gain on the sale of the newsstand
qualifies for capital gain treatment, or that the gain would not
be subject to recapture under sec. 1245 or 1250.
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