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penalty for 2002.1 After a concession,2 the issues remaining for
decision are (1) whether $175,000 petitioner received during 2002
in connection with a settlement of a lawsuit is excludable from
gross income pursuant to section 104(a)(2), and (2) whether
petitioner is liable for an accuracy-related penalty pursuant to
section 6662.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time he filed the
petition, petitioner resided in Sun City, California.
In 1991, petitioner’s wife inherited a home in Sun City,
California (the Sun City residence), in the County of Riverside
(the county). In late 1991, petitioner, his wife, and their
children (the Gibsons) moved into the Sun City residence.
The Sun City residence was in an area zoned as a “Senior
Citizen Development” (SCD) by the county. A county ordinance
provided that an SCD zoning restriction placed a certain age-
related residency restriction (the restriction) on persons
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
2 Petitioner conceded that the Social Security benefits he
received during 2002 are taxable.
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Last modified: November 10, 2007