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the sale of Oak Den totaled $64,090.45.6 In light of the
aforementioned adjusted basis and expenses, the trust reported a
gain of $259,859.55 from the sale of Oak Den on its 1992 income
tax return. The trust also reported interest and rental income
for 1992 in the amounts of $921.13 and $5,085.41, respectively.
After accounting for State income taxes in the amount of
$18,217.50, net taxable income to the trust's beneficiaries for
1992 was $247,648.59.
Mrs. Prokopov was a 30-percent beneficiary in the trust.
Mr. Williams determined that Mrs. Prokopov's share of trust
income for 1992 was $74,294.57. He informed her of such amount
on February 25, 1993. The trust also issued a Schedule K-1 to
Mrs. Prokopov.
Petitioners reported $1,525.62 as income from the trust on
their 1992 Federal income tax return. Respondent subsequently
5(...continued)
percent. He then increased the result by 5 percent of Oak Den's
fair market value as of Mrs. Ogden's death. The calculation is
as follows:
($259,000 * 95%) + ($600,000 * 5%)= $276,050
6The expenses consisted of attorney's fees of $9,482.45,
commissions of $49,980, cleanup costs of $2,750, surveying costs
of $1,625, deed stamp fees of $240, and miscellaneous costs of
$13.
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