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Petitioner introduced no evidence showing that the
corporation forgave the note before the end of 1993. Other
evidence in the record is either neutral on this issue or tends
to support respondent’s position that the corporation had not
forgiven petitioner’s debt to it before the end of 1993. The
failure of the corporation or any of the spinoff corporations to
include the note on its tax return as an asset at yearend 1994
supports respondent’s position that the corporation canceled
petitioner’s indebtedness to it during 1994. Petitioner has
submitted no evidence which shows otherwise. Consequently, we
find that petitioner has failed to carry her burden of proving
respondent’s determination incorrect, and we sustain respondent’s
determination that petitioner realized income during 1994 from
the cancellation of indebtedness in the amount of $50,000.9
Addition to Tax Under Section 6651(a)
Respondent also determined that petitioner is liable for the
addition to tax under section 6651(a)(1). Respondent contends
that petitioner is liable for that addition to tax because she
did not file a timely and valid tax return. According to
9Petitioner does not claim, nor does the record establish,
that the discharge occurred while she was insolvent; accordingly,
we do not address the question of whether the so-called
insolvency exception would be applicable here. See sec.
108(a)(1); Dallas Transfer & Terminal Warehouse Co. v.
Commissioner, 70 F.2d 95 (5th Cir. 1934), revg. 27 B.T.A. 651
(1933); Gershkowitz v. Commissioner, 88 T.C. 984, 1005 (1987).
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