Robert B. Keenan - Page 10

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          Issue 5.  Characterization of New Mexico Losses                             
               The fifth issue is whether petitioner is entitled to a $47,418         
          ordinary loss in 1993 stemming from an IRS forced tax sale of three         
          New Mexico properties he owned.  Petitioner argues that he is               
          entitled to such a loss (arising from the difference between the            
          market value of the properties and the amount realized at auction).         
          On the other hand, respondent argues that petitioner is entitled to         
          a $47,418 capital loss.                                                     
               Petitioner owned four properties at the Mid-Valley Air Park in         
          Las Lunas, New Mexico (a residential airport).  In 1993, the IRS            
          seized these properties in order to satisfy petitioner's Federal            
          income tax obligation for years prior to those in issue.  After             
          selling the four properties, respondent credited petitioner's tax           
          accounts in amounts less than petitioner's bases in these                   
          properties.                                                                 
               Respondent conceded that petitioner is entitled  to a                  
          $19,424.25 ordinary loss in 1993 with respect to one of the                 
          properties; namely, a rental property.  The character of the loss           
          with respect to the other properties, an airplane hangar and two            
          undeveloped 1-acre lots, is at issue.                                       
               Section 1001(a) defines gain or loss from the sale or other            
          disposition of property as the difference between the "amount               
          realized" and the taxpayer's adjusted basis in the transferred              
          property.  The amount realized is the sum of any money received             





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