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that record that Mr. Mitic has failed to prove that petitioners
are entitled to the depreciation deduction claimed with respect
to the Geo in the 1994 joint return. Consequently, we sustain
respondent’s determination disallowing that deduction.
Accuracy-Related Penalty Under Section 6662(a)
Respondent determined that petitioners are liable for each
of the years at issue for the accuracy-related penalty under
section 6662(a). Mr. Mitic makes no argument on brief regarding
those penalties.
Section 6662(a) imposes an accuracy-related penalty equal to
20 percent of the underpayment of tax resulting from a substan-
tial understatement of income tax. An understatement is equal to
the excess of the amount of tax required to be shown in the tax
return over the amount of tax shown in the tax return, see sec.
6662(d)(2)(A), and is substantial in the case of an individual if
it exceeds the greater of 10 percent of the tax required to be
shown or $5,000, see sec. 6662(d)(1)(A).
The accuracy-related penalty under section 6662(a) does not
9(...continued)
was used during 1994 in a trade or business or held for the
production of income. In this connection, the record establishes
that petitioners also claimed in the 1994 joint return deprecia-
tion deductions with respect to at least two other automobiles.
We find it incredible that petitioners used the Geo as well as
those two other vehicles during 1994 in one or more trades or
businesses or held them for the production of income, especially
in light of Mr. Mitic’s testimony that Ms. Mitic was too ill to
work during 1994.
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