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Petitioner reported the distributions from Cold Springs as
ordinary income on her tax return. There is nothing in the
record establishing that such reporting was incorrect. Cold
Springs failed to file tax returns or prepare Schedule K-1 for
the years at issue. If petitioner was entitled to capital gains
treatment for a portion of the distributions from Cold Springs,
then she should have caused Cold Springs to file a return and
accompanying Schedules supporting such treatment. We hold that
petitioner has not shown her entitlement to capital gains
treatment for the 1994 and 1995 distributions. Accordingly, the
distributions are still ordinary income to petitioner.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011