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before respondent settled with his father and brother in 2003.
Petitioner could not have relied on those settlements when he
filed his 1986 amended return. There is no evidence that
petitioner relied on any communication by respondent in preparing
his 1986 amended return. Finally, it appears from our record
that petitioner’s parents and probably his brother were U.S.
residents by 1979. In his petition, petitioner stated that he
became a U.S. resident in 1982. Our record suggests that
petitioner did not establish U.S. residence when his father and
brother did.
We conclude that estoppel does not apply and that petitioner
is not entitled to deduct an expropriation loss in the same
amount as that allowed by respondent in a settlement with his
father and brother.
D. Whether Petitioner Is Liable for the Addition to Tax and
Penalty for Substantial Understatement of Income Tax for
1988 and 1989
For 1988, a taxpayer is liable for an addition to tax equal
to 25 percent of the amount of any underpayment attributable to a
substantial understatement of income tax. Sec. 6661(a). The
amount of the understatement is reduced by amounts attributable
to items (1) for which there existed substantial authority for
the taxpayer's position, or (2) adequately disclosed on the
taxpayer’s return or in a statement attached to the return. Sec.
6661(b)(2)(B).
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