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The parties disagree as to the amount of the Bensons’
reported gross income from NPI’s 1989 Form 1120S. The Bensons
argue that the Hercules payment of $483,098 was reported on NPI’s
amended 1989 Form 1120S, and that the entire $119,508 of gross
rental income reported on the 1989 return of NPI should be
included in the Bensons’ reported gross income. Respondent
argues the Bensons reported only their pro rata share of NPI’s
reported gross income on its original 1989 return.
As we found supra, the Hercules payment was disclosed only
on the amended return of NPI, not the original return. Because
“return” in section 6501(e)(1)(A) does not include amended
returns, see Houston v. Commissioner, 38 T.C. at 489; Goldring v.
Commissioner, 20 T.C. at 81, the Hercules payment is not included
in the Bensons’ reported gross income.
We also disagree with the Bensons that the entire $119,508
of NPI’s reported income from real estate activities is included
in their reported gross income. For purposes of section
6501(e)(1)(A), taxpayers’ reported gross income includes their
pro rata share of gross income from passthrough entities, such as
an S corporation. Benderoff v. United States, 398 F.2d at 135;
Roschuni v. Commissioner, 44 T.C. at 85-86. On its original 1989
Form 1120-S, NPI reported gross income from real estate
activities of $119,508, and listed Burton O. Benson as a 66.7-
percent shareholder of NPI. Therefore, we find that the Bensons’
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