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the partnership owned fractional shares was $37,204, as
petitioners contend, or $64,812.33, as respondent contends. We
hold that it had a fair market value of $59,629.38.
2. Whether petitioners had unreported income of $12,764 for
1998 and $2,735 for 1999. We hold that they had unreported
income of $6,264 for 1998 and $2,735 for 1999.
3. Whether we will grant respondent’s motion to amend the
answer, and, if so, whether petitioners are liable for increased
deficiencies and additions to tax because of their failure to
report (a) business income of $67,437 for 1995 and $87,942.76 for
1998 and (b) distributions from the Anis Recovery Fund
partnership consisting of an ordinary loss of $2,240 for 1995, a
capital gain of $5,594 for 1998, and income of $9,127 for 1999.
We will grant respondent’s motion, and we conclude that
petitioners had unreported income of $67,437 for 1995 and
$87,942.76 for 1998, an ordinary loss of $2,240 for 1995, a
capital gain of $5,594 for 1998, and income of $9,127 for 1999.
4. Whether petitioner is liable for the fraud penalty
under section 66633 for 1995, 1998, and 1999. We hold that he is
to the extent discussed below.
5. Whether petitioners are liable for the accuracy-related
penalty for negligence on a portion of the underpayment of their
3 Section references are to the Internal Revenue Code, and
Rule references are to the Tax Court Rules of Practice and
Procedure.
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