- 4 - petitioner's gain should take into account the legal expenses of $1,349, and that petitioner's gain is $92,388. Discussion Petitioner argues that she had a gain of $29,402 on the sale. Petitioner cites no case law to support her argument, but relies mainly on her interpretation of selected provisions of the Internal Revenue and Bankruptcy Codes. The gist of petitioner's argument is that the amount of the Note is not included in the amount realized on the sale because she was discharged from liability on it. Petitioner does not explain the computation of her proffered $29,402 gain, but we surmise it represents the sum of the following items: (1) Legal fees of $1,349, (2) settlement proceeds of $18,651 received by petitioner at settlement, and (3) $9,402 that was paid at settlement to discharge a Federal tax lien on the residence. Petitioner does not explain the $16,035 difference between the $131,737 selling price and the $115,702 amount that we derive from adding petitioner's proffered gain of $29,402 to the $86,300 that was paid at settlement in order to satisfy the Note. We reject petitioner's argument. Petitioner does not dispute the fact that her gross income for 1991 includes her gain on the sale, see sec. 61(a)(3), or that her gain must be recognized in 1991, see sec. 1001(c). Nor does she dispute the fact that her gain is computed by subtracting her adjusted basis in the residence from the amount realized on its sale. See sec.Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011