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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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