111 T.C. No. 11 UNITED STATES TAX COURT RICHARD D. FRAZIER AND YVONNE FRAZIER, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 3343-96. Filed September 22, 1998. Ps owned investment real property subject to a recourse mortgage. Upon default, the property was acquired by the lender at a foreclosure sale. At the foreclosure sale, the lender bid in an amount for the property which was in excess of the property's fair market value. R determined that the "amount realized" by Ps at the foreclosure sale was the amount bid in by the lender, regardless of fair market value. Held: P's "amount realized" at the foreclosure sale is the property's fair market value. Held, further: Bifurcated analysis used to determine income tax consequences of "amount realized" and income from cancellation of indebtedness. Held, further: Ps are not liable for accuracy- related penalty determined by R. Michael L. Cook and William R. Leighton, for petitioners.Page: 1 2 3 4 5 6 7 8 9 10 11 12 Next
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