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estimated the likely construction costs of the structure at
$253,000 at the time of construction in the early 1970's.
Thereafter, petitioner let the structure stand idle and
unfinished, fenced off to prevent vandalism. One of the walls
of the structure collapsed prior to the 1988 sale and was never
repaired.
On February 8, 1988, petitioner sold the 225-235 Boston
Avenue property, which then consisted of the furniture store
building (the front property) and the unfinished garage/warehouse
structure (the rear property), to the Bridgeport Mini Limited
Partnership (the partnership) for the stated consideration of
$2,710,000. Petitioner received $719,480 in cash and a
nonrecourse purchase money mortgage note in the face amount of
$2,030,400.3 Under the terms of the note, petitioner was to
receive quarterly payments of interest for 3 years, at which time
the principal amount of $2,030,400 and all accrued or unpaid
interest would become due. As part of the sale, petitioner
obtained an engineering report showing that the garage structure
was suitable for conversion into a self-storage facility. He
also obtained the permits necessary for conversion of both the
front and rear properties into self-storage facilities.
3 As part of the $719,480, petitioner received from the
partnership approximately $39,880 above and beyond the sale
price, which was properly reported by petitioner as part of the
payments from the sale that were received during 1988.
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