- 20 -
Petitioner has failed to show that the amount realized by husband
was less than $2,299,920, and we find that it was $2,299,920.
5. Gain
Husband realized a gain of $911,795 ($911,795 = $2,299,920 -
1,388,125) on receipt of the liquidating dividend from Omni.
That gain was recognized to husband in 1986. See sec. 1001(c).
II. Section 6661
Respondent determined that petitioner and husband
substantially understated their income tax liability for 1986 and
petitioner is liable for the addition to tax provided for
in section 6661. The addition to tax for a substantial
understatement of income tax for a taxable year equals 25 percent
of the amount of any underpayment attributable to such
substantial understatement. See sec. 6661(a); Pallottini v.
Commissioner, 90 T.C. 498, 500-503 (1988). There is a
substantial understatement of income tax for a taxable year if
the amount of the understatement for the taxable year exceeds
the greater of 10 percent of the tax required to be shown on the
return or $5,000. See sec. 6661(b)(1)(A). Although petitioner
bears the burden of proof, she has submitted no evidence nor has
she made any argument as to why section 6661 should not apply.
Accordingly, we sustain respondent’s determination of an addition
to tax for a substantial understatement to the extent that the
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