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$3,965 and $19,827, respectively.1 After concessions,2 the
issues for decision are: (1) Whether petitioners were required
to report and pay income tax on a one-third distributive share of
partnership income from Blue Bird Ranch Partnership (the
partnership) in 1988, and (2) whether petitioners are liable for
the additions to tax determined by respondent. We resolve both
issues in favor of respondent.
FINDINGS OF FACT
Some of the facts have been stipulated. The stipulated
facts are incorporated in our findings by this reference.
On the date the petition in this case was filed, petitioners
were married and resided in Waterloo, Iowa. Michael C. Hollen
(petitioner) is a dentist who, during all relevant periods,
operated a professional dental practice through his professional
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
2In the notice of deficiency, respondent determined that
petitioners had unreported taxable gain of $280,275, representing
50 percent of the partnership’s gain from the sale of the ranch
property. Respondent now concedes that only one-third of the
gain from the sale of the property in 1988; i.e., $195,425, is
allocable to petitioners. Petitioners concede that they received
taxable income of $150 from Hawkeye Institute of Technology, $833
from petitioner’s professional corporation, and $89 of interest
from the Blue Bird Ranch Partnership that was not reported on
their Federal income tax return for 1988.
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