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Although petitioner did not present any documentary
substantiation of his cash charitable contributions, he testified
that he had made such contributions to his local church. We find
this part of petitioner’s testimony credible. Therefore, the
claimed cash contributions totaling $200 are deductible. The
claimed deduction for charitable contributions of property was
substantiated by receipts from a charitable organization and by
receipts showing the acquisition cost to petitioner of some
donated property, such as a bicycle and artwork. But petitioner
did not substantiate the date-of-donation value of the property
donated to charity. We therefore sustain respondent’s
determination that the date-of-donation value of the donated
property did not exceed $500. Petitioner is therefore entitled
to a deduction for contributions of property only in the amount
of $500.
As noted supra, respondent determined a section 6662(a)
penalty for 2003. Pursuant to section 6662(a) and (b)(1) and
(2), a taxpayer is liable for a penalty of 20 percent of the
portion of an underpayment of tax attributable to (1) negligence
or disregard of rules or regulations, or (2) any substantial
understatement of tax. In addition, a taxpayer is liable for the
section 6662(a) penalty with respect to the portion of the
underpayment of tax attributable to any substantial valuation
misstatement under chapter 1. Sec. 6662(b)(3).
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