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Respondent also determined that the increased rate of interest
under section 6621(d) applied.1 The issues in this case arise
from petitioner’s involvement in a partnership that was to
acquire an energy management system to be installed in a
manufacturing plant.
After concessions,2 we must decide: (1) Whether petitioner
is entitled to a deduction of $18,956 related to his limited
partnership interest in Sav-Fuel Associates for the taxable year
1981; (2) whether petitioner is liable for an addition to tax
pursuant to section 6659 of $2,843.55 for the taxable year 1981;
and (3) whether petitioner is liable for the increased rate of
interest under section 6621(d). We hold that petitioner is not
entitled to the claimed deduction for 1981 because the
partnership he invested in was an activity not engaged in for
profit within the meaning of section 183. Additionally, we hold
that there was an underpayment of tax of at least $1,000 that was
attributable to a valuation overstatement and that increased
interest applies.
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure. Subsequent dollar amounts are rounded.
2Respondent concedes that the adjustments to petitioner’s
1980 Federal income tax return are barred by the statute of
limitations under sec. 6501. Petitioner concedes that he is
liable for the addition to tax under sec. 6651(a)(1) on any
deficiency decided by the Court for the taxable year 1981.
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