- 9 - is that petitioner did not use reasonable and prudent care in investing in and claiming the deductions and credits from this scheme. Respondent’s determinations as to the additions to tax under section 6653(a) are sustained. B. Section 6659--Valuation Overstatement Under section 6659 a graduated addition to tax is imposed when an individual has an underpayment of tax that equals or exceeds $1,000 and is “attributable to" a valuation overstatement. Sec. 6659(a), (d). A valuation overstatement exists if the fair market value (or adjusted basis) of the property claimed on a return equals or exceeds 150 percent of the amount determined to be the correct amount. See sec. 6659(c). If the claimed valuation exceeds 250 percent of the correct value, the addition is equal to 30 percent of the underpayment. See sec. 6659(b). In the notice of deficiency, respondent determined that petitioner is liable for the section 6659 addition to tax on the portion of his underpayment attributable to valuation overstatement. Petitioner has the burden of proving that respondent's determination of the section 6659 addition to tax is erroneous. See Rule 142(a); Luman v. Commissioner, supra at 860- 861. Petitioner received tax benefits, including investment and business energy tax credits, based on a purported value ofPage: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011