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On January 21, 2000, Karen Hayes, an escrow assistant at the
Placer Title Co., filed a preliminary change of ownership report
with the Sacramento County (the County) Assessor’s Office
regarding the transfer of Stockton/Elsie from petitioner to
Angelo. This form must be filed whenever there is a conveyance
of title record in order for the office to assess the property.
The box on the report indicating that the transfer was a
“purchase” was checked, and the box for the total purchase price
was filled in with $291,483. Angelo’s name on the report was
signed by Ms. Hayes. No one from Angelo’s office advised Ms.
Hayes that the transfer was a “purchase”; however, she filled out
the form using the deed given to her by AKT and marked what she
believed was “appropriate”. In addition, the purchase price,
which was provided by Angelo’s escrow coordinator, Jean Perry,
represented the assessed value of 100 percent of the property,
not solely petitioner’s 22.14-percent interest.
On his 1995 tax return, petitioner claimed a $205,949 loss
for the abandonment of Stockton/Elsie. The amount of the loss
represented petitioner’s basis in Stockton/Elsie as calculated by
petitioner’s tax preparer, Norman Marcoux. In the notice of
deficiency, respondent disallowed the loss. Respondent
determined that petitioner had not established an abandonment
loss, and the loss was not allowable because it was the result of
a transaction with a related party. In addition, respondent
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Last modified: May 25, 2011