Richard D. Frazier and Yvonne Frazier - Page 1

                                   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

Last modified: May 25, 2011