- 2 - Code in effect for the year at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. The issues for decision are: (1) Whether petitioners are required to include in income capital gain from the sale of investment property; (2) whether certain interest payments and taxes that petitioners reported as Schedule E deductions from rental real estate income should be redesignated as Schedule A itemized deductions; and (3) whether petitioners are liable for an accuracy-related penalty pursuant to section 6662(a). FINDINGS OF FACT The parties have stipulated some of the facts, which are so found. The stipulation of facts is incorporated herein by this reference. At the time the petition was filed, petitioners were husband and wife whose primary residence was in Carmel, California. On July 12, 1976, petitioners purchased a house in Pacific Grove, California, for $48,351. They resided in this house for approximately 4 years before converting it into rental property. On April 7, 1992, petitioners purchased a 5-acre lot in Big Sur, California, for $160,316. Their purchase offer contained no contingencies. Borrowing against a personal line of credit, petitioners paid the seller of the property, Marcia D’Esopo, $35,316 as a cash downpayment and assumed a note for the balance of the purchase price. In July 1992, petitioners began work toPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011