- 31 -
Some of this expense was related to acquisition of the Burlington
property from Florence, and some was related to its sale. While
fees incurred in the acquisition of property are part of basis,
and those incurred during sale are a reduction in the amount
realized, either treatment reduces the amount of petitioners'
gain.
Petitioners paid $20,000 in cash, plus releasing Florence
from the mortgage obligations, in consideration for Florence's
transferring title to the Trust. On July 26, 1989, when Florence
transferred title, the Burlington property was subject to the
three outstanding mortgages. The record is silent as to the
exact amount of these debts on that date. However, petitioners
later made the following payments on these mortgages:
Date Amount Lender
Sept. 18, 1989 $32,376.89 United Bank & Trust Co.
Oct. 17, 1989 2,000.00 Connecticut National Bank
Dec. 8, 1989 67,598.56 Shawmut Bank
Dec. 8, 1989 33,367.72 Connecticut National Bank
$135,343.17
These payments were a cost of acquisition as discussed below.
Petitioners argue that their basis in the Burlington
property should include $50,000 for the mortgage from Florence to
Mr. Bowers that was released. This debt was voided by the
Bankruptcy Court on July 6, 1987, as well as ordered released by
the Superior Court on January 31, 1989. See supra notes 2, 3.
Mr. Bowers' inability to collect on this purported debt is not a
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011