Janet L. Pickering - Page 7

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          Unreported Income                                                           
               A taxpayer’s gross income includes all income from whatever            
          source derived, including (but not limited to) compensation for             
          services, gains derived from dealings in property, interest, and            
          dividends.6  Sec. 61(a)(1), (3), (4), (7).  In the present case,            
          petitioner received wages of $1,972, dividends of $1,561,                   
          interest of $1,643, a gain of $12,554.87 from the sale of Peco              
          stock, and a loss of $131.75 from the sale of Americo stock.                
          Accordingly, petitioner’s gross income for the 2000 taxable year            
          is $17,599.12.  We sustain respondent’s determination on this               
          issue to the extent of this amount.                                         
          Addition to Tax Under Section 6651(a)(1)                                    
               If a Federal income tax return is not timely filed, an                 
          addition to tax will be assessed “unless it is shown that such              
          failure is due to reasonable cause and not due to willful                   
          neglect”.  Sec. 6651(a)(1).  A delay is due to reasonable cause             
          if “the taxpayer exercised ordinary business care and prudence              


               6  A taxpayer’s gross income also includes a refund of State           
          income tax in the year received to the extent that said tax was             
          claimed as a deduction in any prior taxable year and resulted in            
          a reduction in Federal income tax.  See sec. 111(a); Kadunc v.              
          Commissioner, T.C. Memo. 1997-92.  While the record indicates               
          that petitioner received in 2000 an income tax refund of $114               
          from the Commonwealth of Virginia Department of Tax, said amount            
          was not included in petitioner’s gross income as part of                    
          respondent’s determination, and respondent did not raise this               
          matter at any time after the issuance of the notice of                      
          deficiency.  Accordingly, we do not address whether the State               
          income tax refund was includable in petitioner’s gross income for           
          the 2000 taxable year.                                                      




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