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charges to seller). Petitioner husband's adjusted basis in the
Wyndmoor property was $234,289 (rounded). Accordingly,
petitioner husband realized $106,509 gain on the sale of the
Wyndmoor property (the adjusted sale price of $340,798 less the
adjusted basis of $234,289)
On February 21, 1989, petitioner wife transferred the
ownership of her King of Prussia property to herself and her
husband for consideration of $1. The outstanding principal
balance on the mortgage on the King of Prussia property on
February 21, 1989, was $140,806. Thereafter, petitioners started
a major renovation project on the King of Prussia property.
On July 24, 1989, petitioners executed an agreement (the
private agreement) between themselves that provided, in pertinent
part, as follows:
1. Wife owns a property at 307 Hughes Road, King of
Prussia, Pennsylvania, on which there is a $155,000[2]
mortgage due and owing to GMAC.
2. Wife intends to transfer ownership of one-half of
the said property to Husband in exchange for Husband's
assumption of one-half of the mortgage balance on which
he agrees he will be jointly and severally liable.
3. Husband intends to sell his residency in Wyndmoor
and the parties agree that all of the proceeds of the
said sale will be utilized to do major improvements to
what will be the marital residence at 307 Hughes Road.
2The parties have stipulated that the correct outstanding
balance of the mortgage on the King of Prussia property was
$140,806.
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