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$219,234 and that allowable depreciation totaled $13,753. On
their 1988 return, petitioners reported that the 8th Street
property was sold in a transaction in which no gain or loss was
recognized under section 1031.
Standard Pacific allowed each purchaser to purchase only one
home on Hastings through its lottery system. Lisa Shumin
(Shumin), Mrs. Goldberg's mother, entered the lottery with
Standard Pacific and was selected to acquire 29 Hastings. The
total purchase price of 29 Hastings was $475,000. Standard
Pacific received an initial deposit of $8,000 in Shumin's name on
or about May 2, 1988.
During 1988 through 1990, Shumin worked as an accountant and
earned approximately $24,000 per year. Shumin qualified to
purchase 29 Hastings only because she misrepresented her income
and job title on the Buyer's Financial Worksheet provided to
Standard Pacific's representative and on the loan application
with Home Savings of America under which the bank loaned $356,200
to her. Of the $122,500 that was needed as a downpayment to
acquire 29 Hastings, petitioners provided at least $93,500,
including the initial deposit and $80,000 that was transferred
from petitioners' escrow on the sale of 14 Siros.
On August 14, 1988, escrow opened for Shumin's purchase of
29 Hastings. Shumin paid $10,119 for flooring installed in 29
Hastings. From December 2, 1988, until February 1989, Shumin
paid $46,500 for landscape improvements to 25 and 29 Hastings.
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