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absolute defense to negligence, but rather a factor to be
considered. In order for reliance on professional advice to
excuse a taxpayer from the additions to tax for negligence, the
taxpayer must show that such professional had the expertise and
knowledge of the pertinent facts to provide valuable and
dependable advice on the subject matter. Goldman v.
Commissioner, 39 F.3d 402, 408 (2d Cir. 1994), affg. T.C. Memo.
1993-480; Freytag v. Commissioner, supra; Kozlowski v.
Commissioner, T.C. Memo. 1993-430, affd. without published
opinion 70 F.3d 1279 (9th Cir. 1995).
Whether petitioner properly deducted the $400,000 involves a
complex factual inquiry. When a guarantor of a corporate debt is
a shareholder and also an employee, mixed motives for a guaranty
may be present, and the critical issue becomes, in an objective
sense, which motive is dominant. United States v. Generes, 405
U.S. at 100.
In addition, petitioner's accountant, who maintained
adequate books and records for petitioner, agreed with his
treatment of the losses. Petitioner, on his 1990 Federal income
tax return, reported that he was deducting $400,000 in capital
losses on his Schedule D. This stems from petitioner's cap loan.
The record also reflects that on petitioner's 1990 Schedule C, he
reported $400,000 in losses pursuant to "personal guarante [sic]
of loan from corporation".
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