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petitioner has met the cooperation and substantiation
requirements, but argues that petitioner has not met the credible
evidence requirement. We disagree.
Credible evidence means the quality of evidence the Court
would find sufficient upon which to base a decision on the issue
if no contrary evidence were submitted. See H. Rept. 105-599, at
240-241 (1998), 1998-3 C.B. 747, 994-995; see also Blodgett v.
Commissioner, 394 F.3d 1030 (8th Cir. 2005), affg. T.C. Memo.
2003-212; Edwards v. Commissioner, T.C. Memo. 2005-52.
Petitioner introduced evidence with respect to the factual
issue in the case, through witness testimony and business records
of the dealership, sufficient, in the absence of contrary
evidence, to prove by a preponderance of the evidence that the
classic cars were inventory held primarily for sale to customers
in the ordinary course of business. Specifically, petitioner
produced evidence that it advertised the classic cars for sale,
sold a substantial number of classic cars, and consistently
reported the sales at ordinary income rates and consistently
treated the classic cars as inventory on its corporate books. We
find this evidence credible as to the factual issue in dispute
and thus sufficient to shift the burden to respondent under
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