- 49 -
to the amounts withdrawn or distributed from BBP over the
existence of the partnership, Melvin withdrew more money from the
partnership than Russell did. Overall, the evidence supports
Russell’s argument that he had a positive basis in his
partnership interest in 1994 after receiving the grain sales
proceeds.
It is respondent’s burden to prove that Russell received
distributions from BBP in excess of his basis in his partnership
interest. See Shea v. Commissioner, 112 T.C. at 197; Wayne Bolt
& Nut Co. v. Commissioner, 93 T.C. at 507. After reviewing all
the evidence in the record, including Russell’s and Mr.
Feldmann’s testimony on the issue and the effect of the
stipulated adjustments on Russell’s basis, we conclude that
respondent has failed to establish that Russell received money
from BBP in 1994 in excess of his basis in his partnership
interest. Accordingly, we hold for Russell on this issue.
IV. Accuracy-Related Penalties for 1994 and 1995
In the notice of deficiency, respondent determined that
Russell and Clarice were liable for the accuracy-related
penalties pursuant to section 6662(a) on the portions of their
underpayments attributable to the following adjustments contained
in the notice of deficiency:
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