- 13 - have received 81 times that amount to make a profit on their investment. The fact that Dollar leased petitioners an interest purportedly worth $93,750 for $4,850, which immediately generated tax savings of $9,629.10, should have prompted petitioners to look beyond Dollar for advice. See Allen v. Commissioner, supra at 353 (taxpayer negligent where tax savings were almost double the amount of their cash outlay). We hold that petitioners are liable for the additions to tax under section 6653(a) for 1980, 1981, 1982, and 1983. 3. Whether Petitioners Overvalued the Video Games Respondent determined that petitioners are liable for additions to tax for valuation overstatement under section 6659. That section provides for an addition to tax of up to 30 percent of the underpayment of tax (of at least $1,000) attributable to a valuation overstatement. Sec. 6659(a) and (b). A valuation overstatement occurs where the claimed value or adjusted basis of property is 150 percent or more of the value or adjusted basis that is "determined to be the correct amount." Sec. 6659(c). The Secretary may waive this addition to tax if the taxpayer shows that there was a reasonable basis for the valuation claimed, and that the claim was made in good faith. Sec. 6659(e). The Court reviews this determination for abuse of discretion. Krause v. Commissioner, 99 T.C. 132, 179 (1992).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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