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that a portion of the underpayment was not fraudulent.30 See sec.
6663(b).
With respect to the Vancouver property, petitioner testified
that he was opposed to purchasing the property, he was not
involved in leasing the property, and he did not report income
earned or claim losses incurred from leasing the property. He
considered Kumiko Talmage to be the sole owner of the Vancouver
property. Nevertheless, the evidence clearly establishes that he
owned a 50-percent interest in the Vancouver property and did not
report his portion of the gain when it was sold. Petitioner has
failed to prove, by a preponderance of evidence, that the failure
to report the gain on the Vancouver property was not fraudulent.
With respect to the Black Butte property, petitioner
testified that he had understood from the tax software program he
was using he was entitled to roll the $60,303 realized from the
sale of the Black Butte property into the Rivercliff property tax
free. Petitioner is a sophisticated taxpayer who has a degree in
business administration and has provided advice on various
financial transactions for over 25 years. Petitioner’s testimony
is not credible. Petitioner has failed to prove, by a
30 Respondent did not apply the fraud penalty under sec.
6663(a) to the underpayment of tax attributable to respondent’s
finding petitioner was not entitled to the full amount of the
foreign earned income exclusion for 1999 and the Schedule F
losses for 2000, 2001, and 2002, which petitioner conceded.
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