- 20 - simplified production method may be elected for any trade or business as a method for determining costs allocable to ending inventories of produced and other eligible property on hand at the end of the year. See sec. 1.263A-2(b)(1) and (2), Income Tax Regs. The record in this case fails to show that petitioners ever made any such election or that they made any argument to respondent that they relied upon the above provision when reporting the expenses on their return for 1995. We find that respondent's position that the $2,008.06 represented an amount that had to be capitalized into the cost of the Vallecito property was a reasonable application of the law given the available facts and circumstances at the time that respondent took his position. Conclusion We find that respondent's positions on the disputed issues were reasonable positions sufficiently supported by the facts and circumstances in petitioners' case and the existing legal precedent. See Pierce v. Underwood, 487 U.S. 552 (1988). Because we find respondent's positions to have been reasonable, we cannot find petitioners to be "prevailing" parties, and their motion will therefore be denied. To reflect the foregoing, An appropriate order will be issued, and decision will be entered under Rule 155.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Last modified: May 25, 2011