Michele Anthony - Page 4

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          Anthony quitclaimed to petitioner his interest in the Compton               
               In February 1994, petitioner was transferred by her employer           
          to Kansas City, Missouri.  The same month, the Compton residence            
          was appraised for Sumitomo Bank; its value was estimated to be              
          $135,500.  In March 1994, petitioner borrowed $100,000 from                 
          Sumitomo Bank, granting a deed of trust against the Compton                 
          residence in favor of the bank.  On or about May 12, 1994,                  
          petitioner purchased a residence in Lee’s Summit, Missouri, for             
               Petitioner began renting the Compton residence following her           
          employment transfer.  Petitioner started attempting to sell the             
          residence at least as early as August 1995, when she entered into           
          an agreement with a real estate agent.  She finally sold the                
          residence on September 27, 1996, for $119,000, incurring expenses           
          of $16,852.                                                                 
               Petitioner filed Form 2119, Sale of Your Home, with her                
          Federal income tax return for taxable year 1996.  She reported              
          gain of $3,255 on this form, but did not include this amount in             
          gross income.  Respondent issued petitioner a statutory notice of           
          deficiency reflecting his determination that petitioner had                 
          unreported long-term capital gain of $49,297 from the sale of the           
          Compton residence.                                                          

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