- 40 -
amount that Canada Life was willing to lend on the security of
the Mall, it would be sheer speculation for us to pick any value
in excess of $4.8 million and use that figure to support charging
petitioner with any additional income for tax purposes.
Respondent has not moved to do so, and respondent would have had
the burden of proving any alleged excess value if we had allowed
an amendment to respondent's answer to that effect. There having
been no motion to amend the answer or argument to this effect by
respondent, see sec. 6214(a), and in view of our uncertainty as
to, and lack of evidence of, the actual amount of the excess, we
have confined our analysis to the acknowledged fact that the Mall
had a value no less than $4.8 million. Cf. Law v. Commissioner,
84 T.C. 985, 989 (1984).
III. Additions
A. Section 6653 Negligence Addition
Respondent determined that petitioners are liable for an
addition to tax for negligence under section 6653(a)(1) for 1988.
Section 6653(a)(1) provides that, if any part of any underpayment
is due to negligence or disregard of rules or regulations, there
shall be added to the tax an amount equal to 5 percent of the
underpayment.
Negligence is a lack of due care or failure to do what a
reasonable and ordinarily prudent person would do under the
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