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(original return) was submitted in January 1996. On the original
return, petitioners attempted to elect 5-year averaging and
capital gains treatment. On the original return, petitioners
reported a gross distribution of $25,313, indicating that $9,202
was the taxable amount and $3,324 was capital gain. Petitioners
submitted an amended return for 1990 (first amended return) in
February 1996, on which petitioners did not elect 5-year
averaging or capital gains treatment. On the first amended
return, petitioners reported a gross distribution of $25,313,
indicating that $9,202 was the taxable amount. Petitioners
submitted another amended return for 1990 (second amended return)
in March 1996, on which petitioners attempted to elect 5-year
averaging and capital gains treatment. On the second amended
return, petitioners reported a gross distribution of $16,203,
indicating that $12,706 was the taxable amount and $3,437 was
capital gain.1
Issue 2. Capital or Ordinary Loss
On January 24, 1988, petitioners purchased a 25-percent
timeshare interest in each of two condominium units (the
timeshares) in B'Mae's Resort in Gilford, New Hampshire, a ski
and lake resort area. The timeshares were purchased for a total
of $89,700. During tax years 1988 and 1989, petitioners had
1 We note that $12,706 plus $3,437 equals $16,143, not
$16,203.
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