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into our findings by this reference. At the time the petition in
this case was filed, petitioners resided in Miami, Florida.
Petitioners are married and filed a joint return for the years at
issue.
Petitioners purchased a parcel of land at 14321 S.W. 47th
Court, Fort Lauderdale, Florida (the land), on July 20, 1983, for
$50,000. Petitioners began building a house on the land in 1987.
Lacking sufficient funds to continue construction beyond the
completed foundation, petitioners sold the land on March 21,
1990, for $142,500.2 Petitioners are over 55 years of age and
did not live on the Fort Lauderdale land at any time. The
parties stipulated that petitioners incurred selling expenses of
$12,395; therefore, the amount realized on the sale was $130,105
($142,500 less $12,395 = $130,105). Respondent concedes that
$575 should be added to the property's basis, increasing
petitioners' adjusted basis in the property to $50,575 ($50,000
plus $575 = 50,575). Thus, the gain on the sale of the land was
$79,530 ($130,105 less $50,575).
2 Petitioners claim that they spent between $25,000 and $30,000
to build a foundation on the land. Petitioners also claim they
expended $3,000 for clearing the land and $2,000 in the
construction of a fence. Ordinarily, the cost of such
improvements would be added to the basis of the land. See sec.
1.1016-2(a), Income Tax Regs. However, taxpayers have the burden
of proving the cost of such improvements. Rule 142(a); INDOPCO,
Inc. v. Commissioner, 503 U.S. 79 (1992); Welch v. Helvering, 290
U.S. 111 (1933). While petitioners presented two invoices
totaling $575, they failed to substantiate by receipts, invoices,
canceled checks, or otherwise, that they made any expenditures in
addition to the $575.
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