David Taylor Enterprises, Inc. & Subsidiaries - Page 10

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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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