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petitioner relies on were disallowed because the relevant assets
were not placed in service during the years that were the subject
of those cases; the disallowance did not result from an asset’s
valuation or basis. Here, valuation or basis was a deciding
factor in determining whether the benefits and burdens of
ownership passed to TBS 89-1. Moreover, as we stated in Keller
v. Commissioner, supra, in rejecting an argument similar to that
of petitioner:
If we accept petitioner’s assertion that he never
received the benefits and burdens of ownership of the
cattle, or that the cattle never existed, then his
bases in the cattle would be zero. See Zirker v.
Commissioner, 87 T.C. 970, 978-979 (1986) (finding that
no actual sale of cattle took place and the correct
adjusted basis of cattle was zero); Massengill v.
Commissioner, T.C. Memo. 1988-427 (same as Zirker),
affd. 876 F.2d 616 (8th Cir. 1989). This conclusion is
supported by petitioner’s concession that he was not
entitled to cost basis or depreciation deductions. If
petitioner’s correct bases are zero, then the bases
claimed on his returns are considered to be 400 percent
or more of the correct amount, and are thus gross
valuation misstatements. See sec. 1.6662-5(g), Income
Tax Regs.; see also Zirker v. Commissioner, supra at
978-979.
b. Negligence/Disregard of Rules or Regulations
Respondent alleged in his answer that petitioner was liable
for 1991 for an accuracy-related penalty under section 6662(a)
because his underpayment of tax for that year was attributable to
negligence or disregard of rules or regulations. Petitioner
argues that he is not liable for such an accuracy-related penalty
because he acted reasonably in joining TBS 89-1 and in monitoring
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