- -17
OPINION
The first issue for decision is whether petitioners'
interest in the Third Street property was sold in December 1987,
resulting in income to petitioners in that year.
In April 1972, petitioner, Mr. Moosbrugger, and Mr. Murray
purchased the Third Street property for the consideration of
$56,000. A lot adjacent to the Third Street property was
purchased 4 months later by Murray, Mack, Moosbrugger, and
Leonard, P.C. In late 1972, petitioner, Mr. Moosbrugger, and Mr.
Murray each conveyed his individual interest in the property to
the corporation, so that as of December 1972 the corporation held
title to the Third Street property and the adjacent lot.
In August 1978, petitioner and Mr. Moosbrugger, doing
business as the Mack & Moosbrugger partnership, purchased a
second lot adjacent to the Third Street property. In September
1978, all real property held by the corporation (the Third Street
property and the adjacent lot) was conveyed to the Mack &
Moosbrugger partnership. It was not until December 28, 1987,
that a deed conveying the Third Street property and the adjacent
lots to the law partnership was executed by the Mack &
Moosbrugger partnership.
Petitioner contends that the purchase agreement entered into
in 1985 in effect transferred any interest petitioner had in the
Third Street property to the law partnership and, therefore, no
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