- 2 -
Year Deficiency Accuracy-Related Penalty
1993 $4,752 $950
1994 17,907 3,581
The issues remaining for decision are:
(1) Must petitioners recognize long-term capital gain in the
amount of $48,193 in 1993 or 1994? We hold that petitioners must
recognize that gain in 1994.
(2) Are petitioners liable for 1994 for the accuracy-related
penalty under section 6662(a) with respect to the two matters
that they have not conceded? We hold that they are.
FINDINGS OF FACT
Many of the facts have been stipulated and are so found.
At the time the petition was filed, Robert S. McDaniel, Jr.
(Mr. McDaniel) and W. Jane McDaniel (Ms. McDaniel), lived in
Sarasota, Florida.
Mr. McDaniel is a practicing attorney who has been spe-
cializing in real estate matters since 1969. In 1981, he and
seven other individuals, including George Palermo (Mr. Palermo)
and Brent Parker (Mr. Parker), formed the Second Street Part-
nership (Second Street or partnership) and became general part-
ners thereof in order to, inter alia, purchase, develop, and hold
for rental income a specified real property located in Sarasota,
1 (...continued)
Procedure.
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