Gary W. McDonough - Page 17

                                       - 17 -                                         
         his offer of $102,000.12  Given the information presented, it was            
         not arbitrary or capricious that Ms. Cochran was not persuaded by            
         petitioner’s statements of possible retirement when evaluating               
         his income from future earnings.                                             
                   3.   Petitioner’s Property                                         
              Petitioner argues Ms. Cochran improperly increased the                  
         value of his house and his Arizona property.  On his Form 433-A,             
         petitioner reported the estimated fair market value of his house             
         was $460,000, with an 80-percent quick-sale value of $368,000 and            
         an outstanding encumbrance of $369,000.  Petitioner’s estimate               
         was based on a professional appraisal dated May 8, 2003.  Ms.                
         Cochran testified she did not accept petitioner’s reported value             
         because the appraisal was over a year old and no longer reflected            
         current value.  Instead, she determined a value of $550,000,                 
         using recent comparable sales.13                                             


               12 Ms. Cochran testified at trial that she originally erred            
          by calculating income potential over 116 months and a 48-month              
          factor was the correct figure to determine income potential                 
          because petitioner made a cash offer.                                       
               13 Ms. Cochran testified at trial that she was not required            
          to use a quick-sale value (80 percent of fair market value) for             
          the real property because, as she determined, it could reasonably           
          sell within 90 days.  The 90-day period was used because,                   
          pursuant to the Form 656, the cash offer had to be paid within 90           
          days from written notice of acceptance of the offer.                        
               Ms. Cochran credited petitioner with a half interest in each           
          property because his wife owned a half interest in each property.           
                                                                                     





Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011