-272-
cases, the portion of a tax underpayment that is attributable to
a valuation overstatement is to be determined after taking into
account any other proper adjustments to tax liability. See
Gainer v. Commissioner, supra at 228; Todd v. Commissioner, 89
T.C. 912, 916 (1987), affd. 862 F.2d 540 (5th Cir. 1988). Thus,
to the extent the taxpayer’s claimed tax benefits are disallowed
on grounds separate and independent from alleged valuation
overstatements, the resulting underpayments of tax are not
regarded as “attributable to valuation overstatements”. See
Krause v. Commissioner, 99 T.C. 132, 178 (1992), affd. sub nom.
Hildebrand v. Commissioner, 28 F.3d 1024 (10th Cir. 1994).
Neither Gainer nor Todd dealt with the definition of a “valuation
overstatement” or the application of the penalty to the reporting
of inflated adjusted bases in properties.192
In Gainer and Todd, the taxpayers made valuation
overstatements of certain property and claimed depreciation
191(...continued)
6659 and consolidated the various accuracy-related penalties into
sec. 6662, carrying over the same essential language as sec.
6659. In the Omnibus Reconciliation Act of 1990, Pub. L. 101-
508, sec. 11312, 104 Stat. 1388-454 to 1388-455, Congress amended
sec. 6662, changing, inter alia, the phrase “valuation
overstatement” to refer to “valuation misstatement”.
192 Former sec. 6659(c), similar to current sec. 6662(e) and
(h), provided: “there is a valuation overstatement if the value
of any property, or the adjusted basis of any property, claimed
on any return is 150 percent or more of the amount determined to
be the correct amount of such valuation or adjusted basis (as the
case may be).”
Page: Previous 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 NextLast modified: May 25, 2011