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Federal income taxes as follows:
Addition to tax Accuracy-related penalty
Year Deficiency sec. 6651 sec. 6662(a)
1991 $18,438 $2,880 $3,688
1992 868 -- --
1993 582 -- --
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable year in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure. All dollar amounts are rounded to the
nearest dollar. References to petitioner are to Miguel Espinoza
Montoya.
After concessions,1 the issues for decision are: (1)
Whether petitioners realized capital gain in 1991 from the
involuntary conversion of their property used in a trade or
business. We hold they did to the extent set out below. (2)
Whether petitioners are liable for the addition to tax for
failure to timely file their 1991 Federal income tax return. We
hold they are. (3) Whether petitioners are liable for the
accuracy-related penalty pursuant to section 6662(a) either for
1Petitioners concede that they realized $18,517 of ordinary
income in 1991. This is the total amount of the depreciation
allowed previously on their involuntarily converted business
property. See sec. 1245. The parties have resolved the issue of
the amount of the Schedule F depreciation deduction that is
allowable with respect to each of petitioners' 1991, 1992, and
1993 taxable years.
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