- 7 -
Cir. 1993); Hanson v. Commissioner, 975 F.2d 1150, 1153 (5th Cir.
1992). However, it is a factor to be considered. Estate of
Perry v. Commissioner, 931 F.2d 1044, 1046 (5th Cir. 1991);
Powers v. Commissioner, supra at 471.
C. Whether Respondent Had a Basis in Fact and Law for the
Position in the Notice of Deficiency
1. Basis in Fact
Respondent contends that respondent's position that
petitioners transferred sand, their business of selling sand,
business operating permits, and land was based on facts learned
from an investigation; a visit to petitioners' land; interviews
of realtors, appraisers, Pasco County officials, and State
officials; and a review of petitioners' documents and affidavits,
and that respondent had some of this information before sending
the notice of deficiency. Respondent also contends that the
like-kind exchange contract and addenda provide that petitioners
transferred the permits.
We disagree. The documents of the sale and statements of
the parties to the transaction show that petitioners transferred
land and no other assets. Respondent does not indicate what the
individuals told respondent's agents during the interviews. We
infer that the interviews did not provide a factual basis for
respondent's position because the trial testimony totally
supported petitioners. Respondent contends that the trial
testimony of the Pasco County Code enforcement officer and the
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