Michael Graham - Page 8

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          consideration exchanged for the residence included the $250,000             
          and $135,000 payments and 3 years of rent-free occupancy of the             
          residence.  Thus, we need not determine whether petitioner’s                
          transfer of the residence to the Foundation was a contribution,             
          or whether petitioner had donative intent relating to such                  
          transaction.  Accordingly, petitioner is not liable for any                 
          excise tax pursuant to section 4941(a)(1) or (b)(1).                        
               Section 6684 imposes a penalty on a person who becomes                 
          liable for a chapter 42 excise tax (i.e., such as those imposed             
          by section 4941) where the act or omission was not due to                   
          reasonable cause and the person had been previously liable.  The            
          penalty is also imposed when the act or omission was both willful           
          and flagrant.  Because petitioner is not liable for tax pursuant            
          to chapter 42, petitioner is not liable for this penalty.                   
               Contentions we have not addressed are moot, irrelevant, or             
               To reflect the foregoing,                                              

                                                  Decision will be entered            
                                             for petitioner.                          

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