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investments in the partnership. These projections, adjusted to
two interests, together with petitioner’s actual cash
expenditures, are as follow:
Cash Expenditures Tax Savings
Year Projected Actual Projected
1982 $9,782 $8,439 $11,998
1983 5,280 5,186 764
1984 5,280 5,186 572
1985 5,280 5,186 360
1986 2,640 3,888 152
28,262 27,885 13,846
Petitioners’ claimed loss from Yuma Mesa for taxable year
1982 was disallowed in the computational adjustment which was
made pursuant to the partnership level proceedings, resulting in
a $9,045 deficiency. Respondent issued petitioners a statutory
notice of deficiency determining additions to tax under sections
6653(a)(1), 6653(a)(2), and 6661, in the respective amounts of
$452.25, 50 percent of the interest due on a $9,045 deficiency,
and $2,261.25.
The first issue for decision is whether petitioners are
liable for additions to tax for negligence under section
6653(a)(1) and (2). Section 6653(a)(1) imposes an addition to
tax equal to 5 percent of the underpayment of tax if any part of
the underpayment is attributable to negligence or intentional
disregard of rules or regulations. Section 6653(a)(2) provides
for a further addition to tax equal to 50 percent of the interest
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