No, not another reality TV show for tax practitioner CPE. Jeffrey Pesarik, T. C. Memo. 2026-20, filed 2/23/26, has a trusty attorney who did a good job eliciting enough from Jeff and his credit card and bank statements to eke out $21K of capital expenditures to offset the sale of one of the two (count ’em, two) houses he built or rehabbed, both of which he sold in the same year. Trouble was, Jeff didn’t report either sale.

I’m surprised Jeff, a property manager in multiple States, never encountered a 1099-S.

Howbeit, as to one building, Ch J Patrick J. (“Scholar Pat”) Urda allows Jeff nothing, and moreover denies him Section 121 primary residence exclusion, as Jeff has no useful paperwork and his testimony is less than convincing.

On the other, his credit cards showing charges from builders’ merchants allows Ch J Scholar Pat to cut Jeff some Cohanslack.

Trusty attorney’s try to get Jeff off negligence chops doesn’t get far.

“Mr. Pesarik also argues that assorted disabilities, including posttraumatic stress disorder, depression, and attention deficit hyperactivity disorder, supply reasonable cause. ‘Where a taxpayer’s disability is raised as part of a reasonable cause defense, we have looked to the severity of the disability and the impact it had on the taxpayer’s life . . . .” Remisovsky v. Commissioner, T.C. Memo. 2022-89, at *5 (quoting Jones v. Commissioner, T.C. Memo. 2006-176, 2006 WL 2423425, at *6). Mr. Pesarik fails to demonstrate that his disabilities interfered with his ability to satisfy his tax reporting obligations or led to the substantial understatement here.” T. C. Memo. 2026-20, at p. 13.