- 9 - bases of more than 400 percent of the amount determined to be the correct adjusted bases. Keller v. Commissioner, T.C. Memo. 2006- 131; Jaroff v. Commissioner, T.C. Memo. 2004-276; see Zirker v. Commissioner, 87 T.C. 970 (1986); see also McDonough v. Commissioner, supra. In that petitioners’ resulting underpayment of tax for 1992 exceeded $5,000, we conclude that their underpayment of 1992 tax resulting from the disallowance of their reported cost bases and depreciation deduction was attributable to a gross valuation misstatement of over $5,000. Massengill v. Commissioner, 876 F.2d 616 (8th Cir. 1989), affg. T.C. Memo. 1988-427; Zirker v. Commissioner, supra; Jaroff v. Commissioner, supra; see also McDonough v. Commissioner, supra. We thus also conclude that petitioners are liable for the 40-percent accuracy- related penalty under section 6662(h) for 1992, unless they meet the section 6664(c) exception for reasonable cause and good faith. Petitioners’ posttrial briefs argue that (among other cases) Gainer v. Commissioner, 893 F.2d 225 (9th Cir. 1990), affg. T.C. Memo. 1988-416, and Todd v. Commissioner, 862 F.2d 540 (5th Cir. 1988), affg. 89 T.C. 912 (1987), establish that the accuracy- related penalty under section 6662(h) cannot apply if an asset such as the cattle at issue fail to exist. We disagree with petitioner’s argument. The deductions in the two cited cases relied upon by petitioners were disallowed because the relevantPage: Previous 1 2 3 4 5 6 7 8 9 10 11 NextLast modified: November 10, 2007