Tim Trying, who is single, purchased a house on the beach in sunny Southern Calliforna 35 years ago. He is now retiring and moving to Hawai for his golden years. Tim sold his house for $1,200,000 this year Tim has been a client of yours for the past decade He became a chent when he was referred to you by your parents, who lived two houses away from Tim. When asked what his tax basis is in the house, Tim says it is $975,000. Your parents bought their house at about the same time, and you know they paid $100,000 for it You have seen Tim's house many times and, although the house is well-maintained, you know it does not have any major improvements or betterments. You are reasonably certain that Tim is overstating his tax basis by hundreds of thousands of dollars in order to avoid reporting a taxable gain on the sale. REQUIRED Would you sign the Paid Preparer's declaration on this return? Why or why not? If you indicate that the Paid Preparer should NOT sign this return, what provision in tax law/code would you be breaking if you did? What is the IRS penalty for the understatement of tax due to unreasonable positions? What is the IRS penalty for the understatement of tax due to willful or reckless conduct