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On the record before us, we find that petitioner has failed
to establish that any reliance on Mr. McVeigh with respect to the
erroneous treatment of the gain from the sale of the drawing in
question as self-employment income was reasonable or in good
faith. Consequently, we sustain respondent's determination
imposing the accuracy-related penalty on the portion of the
underpayment for 1989 that is attributable to that treatment.
Erroneous Calculation of Petitioner's
Self-employment Income for 1989
The parties agree that if the Court were to sustain
respondent's determination that the gain from the sale of the
drawing in question constitutes long-term capital gain, that gain
should not have been included in petitioner's self-employment
income for 1989 for purposes of calculating the deductible
portion, if any, of petitioner's 1989 SEP contribution. However,
even assuming arguendo (1) that, contrary to our finding, the
gain from the sale of the drawing in question were ordinary
income, and not capital gain, and (2) that, contrary to the
agreement of the parties, the use of the 25-percent limit were
proper, the amount of the deduction that petitioner claimed in
his 1989 return for the SEP contribution nonetheless exceeded 25
percent of his self-employment income for that year. That is
because, in calculating petitioner's self-employment for 1989,
Mr. McVeigh failed to aggregate the results shown in all Sched-
ules C of his 1989 return and instead aggregated the results of
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