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petitioners’ reliance on their accountant was reasonable. We
hold, therefore, that petitioners are not liable for section
6662(a) accuracy-related penalties for 1992 and 1993 with respect
to that part of the underpayments attributable to the disallowed
depreciation and Schedules C and E expenses claimed with respect
to the 5401-9 S. Broadway property.
We reach a different conclusion, however, with respect to
the 5415 S. Broadway property. Petitioners presented scant
information regarding their purported rental activity at the 5415
S. Broadway property, and they did not attempt to substantiate
their Schedule E expenses claimed with respect to that property
for 1992 and 1993. Petitioners have failed to establish that
they acted reasonably and in good faith in deducting the Schedule
E expenses from that property. Consequently, we sustain
respondent’s determinations that petitioners are liable for the
section 6662(a) accuracy-related penalties for 1992 and 1993 with
respect to that part of the underpayments attributable to the
disallowed expenses petitioners deducted with respect to the 5415
S. Broadway property. Rule 142(a).
Petitioners also failed to prove that they acted reasonably
and in good faith in deducting on their 1993 return a prior year
unallowed passive loss of $1,345.20 Consequently, we sustain
20Petitioners did not offer any evidence to explain the
source of the prior year passive loss or why they claimed they
(continued...)
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