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Having concluded that there was a valid and enforceable
deficiency judgment against petitioner following the foreclosure
sale, and that, therefore, petitioner's liability was not
extinguished as a result of the failure of the clerk of court to
docket the judgment, this case cannot be distinguished from the
Aizawa case. Accordingly, based on the Aizawa case, the amount
realized by petitioners on the foreclosure sale was the sum of
$450,000, the amount for which the property was sold at public
auction. The excess of petitioner's basis of $520,379 over the
amount realized of $450,000 yields a loss of $70,379 to
petitioners. Petitioners, therefore, are sustained on this
issue.8
The second issue, in view of the Court's holding that
petitioners realized a loss on the foreclosure, is whether
petitioners are entitled to a credit or refund for an overpayment
of their 1989 taxes. This Court has jurisdiction under section
6512(a) and (b) to determine an overpayment of taxes and the
amount of such overpayment to be credited or refunded for any
year before the Court.
On their 1989 Federal income tax return, petitioners'
Federal income tax, after taxes withheld, was $11,580. On
April 12, 1991, petitioners filed an amended income tax return
8
On their 1989 amended Federal income tax return, petitioners
claimed a loss of $75,379. On brief, however, petitioners argued
that they realized a loss on the foreclosure sale in the amount
of $70,379. The Court agrees that $70,379 is the correct amount
of the loss.
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