Conrad George Olsen - Page 6




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          not file a 1994 return to report the $3,981.05 in interest income           
          he received in 1994.  Petitioner did not personally perform any             
          research or other investigation to confirm his belief that he did           
          not realize a taxable gain on the sale of the Tryon Road property           
          or that he was not required to file a tax return for the 1994               
          taxable year.                                                               
              Petitioner did not file a Federal income tax return for the             
          taxable year 1994 until November 30, 1998, after the Internal               
          Revenue Service had inquired why he had not filed a tax return.             
          On his 1994 Federal income tax return, petitioner reported                  
          $3,981.05 of taxable interest and a capital loss of $453.59 from            
          the sale of the Tryon Road property.  Petitioner calculated the             
          capital loss from the sale of the Tryon Road property by                    
          increasing his cost basis in the Tryon Road property by                     
          $103,203.22.  The following is a summary of petitioner’s loss               
          calculation:                                                                
              Sales price               $175,018.13                                   
              Selling charges           (   4,756.51)                                 
              Adjusted sale price       $170,261.62                                   
              Purchase price            $ 65,092.99                                   
              Logging permit            50.00                                         
              Surveys                   2,369.00                                      
              Adjusted basis            $ 67,511.99                                   
              Preliminary gain          $102,749.63                                   
              Payment to Ms. Olsen      ( 103,203.22)                                 
              Reported loss on sale     ($    453.59)                                 








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