Woody F. Lemons - Page 36

                                       - 36 -                                         
             petitioner acquired with funds borrowed from the joint                   
             venture.  However, one of the findings of fact requested by              
             petitioners in their post-trial brief states as follows:                 
             "Petitioners basis in the partnerships which became                      
             worthless was $1,240,000."  Respondent answered                          
             "no objection" to this requested finding and, in effect,                 
             conceded this issue.                                                     
                  Third, respondent determined that Mr. Lemons had                    
             realized a long-term capital loss in 1986.  "Long-term                   
             capital loss" means loss from the sale or exchange of a                  
             capital asset held for more than 1 year.  Sec. 1222(4).                  
             In these cases, Mr. Lemons purchased the nine club member-               
             ships on or about January 16, 1986, at the time the beach                
             club closed the loan transaction with the permanent lender,              
             Sandia.  The parties agree that the club memberships had                 
             become worthless by the end of 1986.  Petitioners disagree               
             that the losses should be treated as capital losses but                  
             they have not raised an issue about the treatment of the                 
             losses as long-term capital losses, rather than as a short-              
             term capital losses.                                                     
                  Fourth, respondent determined that the subject losses               
             arose from the sale or exchange of capital assets, the                   
             club memberships.  See sec. 165(f).  Respondent's brief                  
             acknowledges that the club memberships became worthless and              






Page:  Previous  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  44  45  Next

Last modified: May 25, 2011