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B. Substantial Valuation Misstatement
In the notice of deficiency for 1989, respondent determined
that the accuracy-related penalty should be imposed based on
either a substantial valuation misstatement or a substantial
understatement of income tax or negligence. We begin with
whether there was a substantial valuation misstatement for 1989.
As relevant herein, section 6662(e) provides that there is a
substantial valuation misstatement if the value or adjusted basis
of any property claimed on a return is 200 percent or more of the
amount determined to be the correct amount. Sec. 6662(e)(1)(A).
Also, as relevant herein, section 6662(e) does not apply unless
the portion of the underpayment attributable to the substantial
valuation misstatement exceeds $5,000. Sec. 6662(e)(2).
Respondent contends that the adjusted basis of the Sentinel
EPE and EPS recyclers claimed by petitioner on his 1989 return
exceeds by at least 200 percent, the fair market value of the
recyclers. Petitioner bears the burden of proving that
respondent's determination is erroneous. Rule 142(a); Bixby v.
Commissioner, 58 T.C. 757, 791-792 (1972).
1. The Sentinel EPE Recycler
In order to establish the market value of the Sentinel EPE
recycler, respondent presented the testimony and expert witness
reports of Grossman and Lindstrom. Opinions of experts are not
binding on this Court and may be rejected entirely if contrary to
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