- 10 -
law." Id. Moreover, the Court stated that "the claimed losses
were supported by a credible and unprecedented (albeit erroneous)
theory". Our opinion in Finkelman makes clear that the deduc-
tions, while disallowed, were not frivolous, fraudulent, or
phony.
We find that, under the circumstances presented herein, the
deductions are not attributable to grossly erroneous items within
the meaning of section 6013(e)(2)(B). Petitioner is, therefore,
not relieved of joint liability with respect to any part of the
income tax deficiencies.
Decision will be entered for
respondent.
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Last modified: May 25, 2011