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tax required to be shown in petitioners’ joint return or $5,000,
see sec. 6662(d)(1)(A), petitioners have failed to establish
there is no substantial understatement of tax under section
6662(b)(2) and (d).
We turn now to respondent’s determination under section
6662(a) and (b)(1). For the reasons set forth above explaining
why we found that petitioners failed to show that they had a
reasonable basis for their position in petitioners’ joint return
regarding petitioners’ capital gain, we find on the record before
us that petitioners have failed to show that, in not reporting
that gain, (1) they made a reasonable attempt to comply with, and
did not intentionally disregard, section 1001 and the regulations
thereunder, including Example 8, Frazier v. Commissioner, supra,
and Community Bank v. Commissioner, supra, and (2) they acted
with due care and did what a reasonable person would do under the
circumstances. We further find on that record that petitioners
have failed to establish that they were not negligent in failing
to report that gain in that return.
On the instant record, we also find that petitioners have
failed to show that they acted with reasonable cause and in good
faith with respect to the portion of the underpayment of tax for
1993 that is attributable to petitioners’ capital gain. See sec.
6664(c).
Based on our examination of the entire record before us, we
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