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motion for summary judgment. Therefore, having redetermined a
deficiency of zero, respondent's additions to tax must fail, and
we so hold.
B. The Daughters
Respondent determined additions to tax under sections
6653(a)(1) and (2) and 6661 against each of the daughters.
Section 6653(a)(1) provides that, if any part of the
underpayment of tax is due to negligence or intentional disregard
of rules or regulations, there shall be added to the tax an
amount equal to 5 percent of the underpayment. Section
6653(a)(2) imposes a separate addition to tax, equal to
50 percent of the interest payable under section 6601, on the
portion of the underpayment that is attributable to the
negligence of the taxpayer. For purposes of section 6653(a),
negligence is defined as the failure to exercise the due care of
a reasonable and ordinarily prudent person under like
circumstances. Neely v. Commissioner, 85 T.C. 934, 947 (1985).
Section 6661 provides for an addition to tax equal to
25 percent of the amount of any underpayment attributable to a
substantial understatement. An understatement is "substantial"
when the understatement for the taxable year exceeds the greater
of (1) 10 percent of the tax required to be shown or (2) $5,000.
The understatement is reduced to the extent that the taxpayer
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