- 10 -
report any interest income received from the State. However,
petitioners now concede that, for taxable year 1989, they had
unreported postjudgment interest income from the State in the
amount of $1,333.35.5
Petitioners never asked the Internal Revenue Service (IRS)
for an extension of time in which to buy replacement property
pursuant to section 1033. Furthermore, petitioners did not,
prior to October 1991, notify the IRS that they had bought
replacement property with the condemnation proceeds.
In 1989, petitioners purchased property in Bath County,
Virginia (Bath Co. property), paying $125,000 for such property.
In 1993, petitioners rented out the Bath County property with the
agreement that the property would remain on the market and, if
sold, the rental agreement would terminate. Petitioner called
the IRS in the Spring of 1989, and he was referred to section
1033; after reviewing the code section, he concluded that he had
acquired replacement property that complied with section 1033.
In 1987, petitioners bought 691.043 shares of International
Stock Fund from T. Rowe Price (stock fund) for the total amount
of $19,750. In 1987, petitioners received distributions from the
stock fund in the amount of $7,006.92. Petitioners reinvested
this amount into the stock fund. In 1988, petitioners received
5 Although the parties stipulated that the postjudgment
interest was $1,335.35, this appears to be a typographical error,
as the schedule accompanying the State's deposit listed the
postjudgment interest as $1,333.35. Accordingly, we find that
the stipulated postjudgment interest income is $1,333.35.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011