- 41 - he was not and he failed to disclose that he was a broker or dealer in options. See, e.g., Little v. Commissioner, T.C. Memo. 1993-281, affd. 106 F.3d 1445 (9th Cir. 1997). In conjunction with the option trading question, we allocated between petitioner and Mrs. Corrigan the capital gains/losses from three separate accounts for 1987, 1990, and 1991. We note that of the three accounts in question, one was in petitioner’s name, one in Mrs. Corrigan’s, and one was jointly held between petitioner and Mrs. Corrigan. Petitioner and Mrs. Corrigan (from whom he was divorced at all pertinent times) attempted to file joint returns for 1987 through 1991. As a matter of law, they were not entitled to do so. Accordingly, we held that petitioner was not entitled to combine the gains and losses of the three accounts for reporting purposes. There was, however, no disclosure made on the returns indicating that petitioner and Mrs. Corrigan were divorced or that they were otherwise justified in filing a joint return. Likewise, it was not reasonable to claim joint filing status at a time when petitioner knew he was divorced. There was therefore no adequate disclosure or reasonable cause for the position reported by petitioner. We accordingly hold that the substantial understatement addition is applicable with respect to this adjustment for 1987.Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Next
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