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petitioners, if any. Telim’s books and records were not
produced. The amount of petitioners’ losses with regard to their
investment in Telim is not established.
Petitioners’ claim--that all funds they invested in Telim
should be treated as capital losses for 1990 relating to non-
section 1244 stock--is inconsistent with petitioners’ settlement
of their case in this Court involving 1989, pursuant to which
petitioners’ Telim stock was given section 1244 stock treatment.
Petitioners’ attempt to recast funds they invested in Telim as
representing either loans or as nonsection 1244 stock appears to
be nothing more than a belated attempt to manufacture capital
losses to offset capital gain income petitioners admit they
failed to report on their 1991 joint Federal income tax return.
Under section 6662(a), a 20-percent accuracy-related penalty
applies to underpayments of tax attributable to negligence.
Petitioners argue that unforeseen delays in construction of
their new residence caused them to miss the 2-year tax free roll-
over period relating to gain on sale of their California
residence and that they relied on their tax return preparer in
deducting moving expenses paid by their employer.
The credible evidence does not support petitioners’
argument. We sustain respondent’s determination of the accuracy-
related penalty.
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