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a taxpayer must show that he reasonably relied in good faith upon
a qualified adviser after full disclosure of all necessary and
relevant facts. Collins v. Commissioner, 857 F.2d 1383, 1386,
(9th Cir. 1988), affg. Dister v. Commissioner, T.C. Memo. 1987-
217; sec. 1.6664-4(b)(1), Income Tax Regs.
Applying these principles to this case, we conclude that
petitioners have sustained their burden of establishing that they
had reasonable cause for: (1) Their claimed 1992 and 1993
Schedule C deductions from the 5401-9 S. Broadway property; (2)
their claimed 1992 and 1993 Schedule E deductions from that
property; and (3) their claimed NOL deductions for 1992 and 1993.
Petitioners engaged the services of William D. Collins, C.P.A.,
to prepare their 1992 and 1993 income tax returns. Mr. Collins
had prepared petitioners’ returns since 1968 and was familiar
with petitioner’s activities involving the 5401-9 S. Broadway
property. Petitioners provided Mr. Collins with all the
information relevant to the proper tax treatment of the foregoing
items.
Mr. Collins testified that, around 1987, a fictitious
business name statement was filed for the “5-4 Louisiana
Creole/Cajun Restaurant” that petitioner planned to operate at
the 5401-9 S. Broadway property, and petitioners obtained an SBA
loan. Mr. Collins also testified that, after petitioners
received the SBA loan in 1987, he concluded that the interest
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