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"docket" the judgment pursuant to this statutory provision.4
However, Citizens never released petitioner from his obligation
on the judgment; the judgment was never canceled from the public
records, and the parties stipulated that "Citizens Bank expected
Webb [petitioner] to pay the deficiency balance".
At some point in 1988, Waddell, one of the debtors, filed
for bankruptcy and was discharged from his obligation on the
note. Also, sometime in 1989, Truman, another debtor, filed for
bankruptcy and was discharged from his obligation on the note.
There is no evidence that either of these debtors made any
payments on the note and/or the judgment.
The parties have stipulated that, at the time of the
foreclosure sale, the adjusted basis of the foreclosed property
was $520,379, and the property had a fair market value of
approximately $625,000.
In December 1988, following the sale and adjudication of the
property to Citizens, petitioner entered into an agreement with
Citizens whereby petitioner agreed to be the listing agent for
the sale of the property. Under the agreement, petitioner would
4
Under Utah law, petitioner had the right to redeem the
property sold at the foreclosure, and the sheriff's sale was not
final until 6 months after the sale. Utah R. Civ. P. 69 (1994).
Petitioner did not redeem the property, and the sale became final
on May 23, 1989. Accordingly, petitioner did not deduct his loss
on the foreclosure sale of the property until tax year 1989, the
year the sale became final. See R. O'Dell & Sons Co. v.
Commissioner, 169 F.2d 247, 249 (3d Cir. 1948), affg. 8 T.C. 1165
(1949). Respondent does not challenge that the sale was final in
1989, and that 1989 is the proper year for recognizing any gain
or loss from the sale for tax purposes.
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