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determined that petitioners had a $29,9041 unreported capital
gain. However, respondent failed to give petitioners basis
credit in determining their capital gain on the sale of the
stock. On brief, respondent conceded that petitioners had a
basis in the stock fund of $29,214 and therefore are entitled to
a $2,009 loss on the sale of the stock. Accordingly, respondent
should have subtracted $31,913 from her $29,904 of determined
unreported capital gain income. This adjustment will account for
petitioners' $2,009 capital loss. However, as discussed above,
respondent's Rule 155 computation erroneously decreases
petitioners' capital gain by only $27,800.
Accordingly, we sustain petitioners' Rule 155 computation
for 1990. However, with respect to the Rule 155 computation for
1989, the parties shall make the necessary adjustments as
discussed herein.
To reflect the foregoing,
An order will be issued
for 1989 and 1990 directing the
parties to resubmit their Rule 155
computations in accordance with the
findings herein.
1 We note that the record is unclear as to the source of the
additional $2,698 ($29,904 minus $27,206) of capital gain income.
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