- 19 -
construe petitioner's latter argument as invoking section
6664(c), the reasonable cause exception to the accuracy-
related penalty.
Based upon the facts and circumstances of this case,
we find that petitioner has failed to meet his burden of
proving that he is not liable for the accuracy-related
penalty. On the subject returns, petitioner labeled the
deduction of his commodity trading losses as "Research &
Experimentation to Improve Trading System Formula for
Sale". That label suggests that petitioner claimed the
amounts as research or experimental expenditures under
section 174. Neither of petitioner's returns discloses
the fact that the subject amounts are losses from trading
commodity futures. Significantly, as mentioned above,
petitioner did not pursue the claim that the subject
amounts are research or experimental expenditures in his
post-trial brief. Moreover, we know of no authority
permitting losses from the sale or exchange of capital
assets to be treated as ordinary in these circumstances.
Finally, we are not convinced that the underpayment was the
result of an honest misunderstanding of fact or law that is
reasonable in light of the facts and circumstances of this
case.
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