S. Victoria Wells - Page 5

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          petitioner's attorney acknowledged and agreed to Mr. Wells'                 
          "reservation of the right to contest the legal effect of the                
          delivery and the overall consideration relating thereto."                   
               On Mr. Wells' 1989 Federal income tax return, he claimed the           
          deduction for the home mortgage interest and the real property              
          taxes on the Paddock Lane property.  The proceeds from the sale             
          of the Paddock Lane property were considered in the overall                 
          settlement or distribution of the marital estate on June 12,                
          1991.                                                                       
               Petitioner reported in her 1989 Federal income tax return              
          that she sold her home for $630,000.  She further reported                  
          selling expenses of $58,933, which produced $571,067 as the                 
          amount realized on the sale.  Petitioner then reported a long-              
          term capital gain of $10,199 on the sale.                                   
               Petitioner's basis in the Paddock Lane property was $229,868           
          at the time of the August 17, 1989 sale.2  Selling expenses of              
          the Paddock Lane property were $50,884.3                                    



               2 Respondent apparently computed the deficiency without                
          taking into account petitioner's basis in the property.  We will            
          give effect to the parties' stipulation as to the basis of the              
          Paddock Lane property.                                                      
               3 As noted above, petitioner reported $58,933 as expenses              
          related to the sale of the Paddock Lane property.  However, we              
          will give effect to the parties' stipulation that the selling               
          expenses were $50,884.                                                      






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