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not entitled to his claimed 1992 and 1994 losses from Roadmaster
Leasing.12
Issue 4. Section 6662 Accuracy-Related Penalties
Respondent determined that petitioner was liable for an
accuracy-related penalty under section 6662(a) and (b)(2) for
substantial understatement of his income taxes for 1992 through
1995.
An understatement of income tax is substantial if it exceeds
the greater of (1) 10 percent of the tax required to be shown on
the return, or (2) $5,000. See sec. 6662(d)(1). Except in the
case of an item attributable to a "tax shelter", an
understatement is reduced by the portion of the understatement
that is attributable to the tax treatment of an item for which
there is substantial authority, see sec. 6662(d)(2)(B)(i), or
with respect to which there is adequate disclosure, see sec.
11(...continued)
the intent of the partnership. In order for a partnership to be
entitled to a deduction for expenses attributable to a trade or
business in computing its taxable income (or loss) under sec.
703(a), it must be established that the partnership engaged in
the activity in question with a profit motive. That profit
motive analysis is to be made at the partnership level. See
Brannen v. Commissioner, 722 F.2d 695, 702-705 (11th Cir. 1984),
affg. 78 T.C. 471, 499-505 (1982).
12On brief, petitioner contends in the alternative, that he
should be allowed an abandonment loss under sec. 165. We do not
consider this abandonment loss issue to be properly before us, as
petitioner never timely raised this issue and is attempting to do
so for the first time on brief.
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