Jose M. Vidaurre and Ana Maria Vidaurre - Page 3

                                        - 3 -                                         

          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           
               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.                                                       

Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011