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deductions. Additionally, petitioners included with their tax
returns for the 2 years at issue a Schedule D, Capital Gains and
Losses, with respect to capital assets they sold or exchanged.
On the 1998 return, petitioners reported sales of Intel Corp.
stock of $52,280, with a basis of $54,603, and claimed a capital
loss of $2,323. On the 1999 return, petitioners reported sales
of Intel Corp. stock for a selling price of $71,063, a basis of
$72,229, and a net capital loss of $1,166. In the notice of
deficiency, respondent not only disallowed the capital losses
claimed for the 2 years but determined that petitioners realized
capital gains of $54,603 and $72,229, respectively, for the 2
years for the stated reason that petitioners failed to establish
any basis in the stocks sold. At trial, the parties agreed to
petitioners' entitlement to capital losses of $1,568 and $1,473,
respectively, for 1998 and 1999. Respondent further agreed that
the section 6662(a) penalty would not be applicable to any
portion of the deficiencies attributable to the capital gain
settlement (which apparently would apply only to the 1998 tax
year).
Royal Wiley (petitioner) was employed by Intel Corp. during
the years at issue. Mrs. Wiley was not employed. Prior to the
years at issue, petitioners had utilized the services of a
commercial tax preparation service for the preparation of their
Federal income tax returns. Petitioners were not satisfied with
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