- 31 -
as true. Wood v. Commissioner, 338 F.2d 602, 605 (9th Cir.
1964), affg. 41 T.C. 593 (1964); Niedringhaus v. Commissioner, 99
T.C. 202, 212 (1992); Tokarski v. Commissioner, 87 T.C. 74, 77
(1986); Snyder v. Commissioner, T.C. Memo. 1995-285; Sacks v.
Commissioner, T.C. Memo. 1994-217. Petitioner owned significant
interests in two successful floor covering companies,
participated in successful real estate ventures and IPO's, and in
1981 his investment decisions yielded capital gains in excess of
$300,000. His demonstrated business acumen and investment
sophistication show that he possessed the intelligence and
experience to recognize that further investigation of the
transaction in issue was required. A taxpayer may rely upon his
adviser's expertise (in this case accounting), but it is not
reasonable or prudent to rely upon an adviser regarding matters
outside of his field of expertise or with respect to facts that
he does not verify. See David v. Commissioner, 43 F.3d at 789-
790; Goldman v. Commissioner, 39 F.3d at 408; Skeen v.
Commissioner, 864 F.2d 93 (9th Cir. 1989), affg. sub nom. Patin
v. Commissioner, 88 T.C. 1086 (1987); Lax v. Commissioner, T.C.
Memo. 1994-329; Sacks v. Commissioner, supra; Rogers v.
Commissioner, T.C. Memo. 1990-619.
3. Miscellaneous
Petitioners stipulated that the fair market value of a
Sentinel EPE recycler in 1981 was not in excess of $50,000.
Notwithstanding this concession, petitioners contend that they
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