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shown on the return. See sec. 6661(b). The amount of the
understatement may be reduced under section 6661(b)(2)(B) for
amounts adequately disclosed or supported by substantial
authority. Neither exception under section 6661(b)(2)(B) applies
because no amounts were adequately disclosed or supported by
substantial authority.
Because the parties have made various concessions, they will
have to determine whether petitioners substantially understated
their income taxes when making the Rule 155 computations. For
this purpose, the parties will take into account the parties’
concessions and our disallowance of petitioner’s deductions for
the construction expenses and the credit card charges.
In reaching our holdings herein, we have considered all
arguments made by petitioners, and to the extent not mentioned
above, we find them to be irrelevant or without merit.
To reflect the foregoing,
Decisions will be entered
under Rule 155.
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