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Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable year in
issue.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated herein by this reference. Petitioner
resided in Vancouver, Washington, when he filed the petition in
this case.
A. Long-Term Capital Gain
During 1997 petitioner received from Fidelity Investments
dividends of $10,469.05, short-term capital gain of $3,035.05,
and long-term capital gain of $5,603.72.
On Schedule B, Interest and Dividend Income, of his 1997
individual income tax return, petitioner reported gross dividends
and distributions of $13,504.40, deducted from this amount
capital gain distributions of $5,603.72, and carried forward to
line 9 of his Form 1040 for 1997 the resulting amount of
$7,900.68. Petitioner reported the capital gain distributions on
Schedule D, Capital Gains and Losses, Form 1040 for 1997.
Nevertheless, in effect, petitioner simply omitted from his
income reported for 1997 an amount equal to the long-term capital
gain distributions he received for that year. On July 20, 1999,
respondent issued a notice of deficiency, adjusting petitioner’s
1997 gross income by including in petitioner’s income the $5,603
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Last modified: May 25, 2011