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MEMORANDUM FINDINGS OF FACT AND OPINION
LARO, Judge: This is an affected items proceeding arising
from disallowed partnership losses claimed for 1989 and 1991 by
Timeshare Breeding Service 1989-1, J.V. (TBS 89-1), a cattle
partnership organized, promoted, and operated by Walter J. Hoyt
III (Hoyt).2 Petitioner was a partner in TBS 89-1, and he
reported his distributive shares of its reported losses on his
1989 and 1991 Federal income tax returns. Respondent determined
that petitioner is liable for the following accuracy-related
penalties with respect to his reporting of those disallowed
losses:3
Accuracy-related penalties
Year Sec. 6662(a) Sec. 6662(h)
1989 -0- $3,577.20
1991 $5,669.40 -0-
2 Respondent’s disallowance of these losses was upheld in
Durham Farms #1, J.V. v. Commissioner, T.C. Memo. 2000-159, affd.
59 Fed. Appx. 952 (9th Cir. 2003).
3 For 1989, respondent determined that the accuracy-related
penalty under sec. 6662(h) applied to the portion of petitioner’s
underpayment resulting from a disallowed depreciation deduction
claimed by TBS 89-1. For 1991, respondent determined that
petitioner had an underpayment attributable to one or more of the
following under sec. 6662(a) and (b): (1) Negligence or
disregard of rules or regulations; (2) substantial understatement
of income tax; (3) substantial valuation misstatement. Because
respondent in his posttrial opening brief addresses only the
first two elements, we consider respondent to have waived any
argument that petitioner’s underpayment for 1991 was attributable
to a substantial valuation misstatement.
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Last modified: November 10, 2007