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net investment income. Petitioner had net investment income of
$1,744 in 1999.
Under section 163(d)(4)(B), a taxpayer may elect to increase
net investment income by net capital gain from property held for
investment. The election, however, must be made on or before the
due date, including extensions, of the tax return for the year in
which the net capital gain is recognized. Sec. 1.163(d)-1,
Income Tax Regs. Because petitioner did not file a timely
return, he is not entitled to the election.
Petitioner has offered no evidence or argument with respect
to respondent’s disallowance of his claimed investment interest
expense. Respondent’s determination in this regard is sustained.
Section 6651(a)
Petitioner contends that he was not required to file a tax
return for 1999 because no tax was due. The stipulated amounts
of income that he received during that year, however, far exceed
the threshold requirements for individuals to file returns.
Respondent has carried the burden of production imposed by
section 7491(c). See Higbee v. Commissioner, 116 T.C. 438, 447
(2001). In order to avoid the penalty under section 6651(a),
petitioner must establish reasonable cause for his failure to
file. His purported belief, clearly mistaken, is not reasonable
cause. There is no indication that petitioner sought competent
professional advice with respect to his 1999 tax return. Even if
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