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allowed by respondent as adjustments to basis. Based on the
Court’s review of the evidence, however, we further conclude that
petitioner is entitled to an adjustment under section 1034(a)
with respect to the Rose Point Lane property. Consequently, we
hold that petitioner realized and must recognize capital gain of
$21,213, $455,690, and $33,638 on the sale of the Market Street
property, Rose Point Lane property, and Hollywood Hill lot,
respectively.
II. Section 6651(a)(1) Addition to Tax
Respondent determined that petitioner is liable for an
addition to tax under section 6651(a)(1) because he failed to
file returns for the taxable years 1996 and 1999.16 Petitioner
argues that he did not file returns for these years because the
IRS did not provide him with the statutory provisions he
requested indicating the tax rate and type of tax he was required
to pay and that, without such information, he would be in danger
of filing a fraudulent return. Petitioner further argues that
the IRS’s November 6, 2002, letter informing him that the tax
laws are constitutional was generic, did not pertain to him
personally, and did not address the questions he had presented to
16Because respondent has now conceded that petitioner does
not owe any income tax deficiency or addition to tax for 1998, we
do not address respondent’s original 1998 determination.
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