- 8 -
unrelated third party for $75,500. At the time of that sale, the
basis of Mr. Daimler and Ms. Mondragon in that portion of the
Building and land was $69,178. They failed to include the gain
(i.e., $75,500 minus $69,178, or $6,322) that they realized on
the November 1, 1989 sale in their joint return for 1989. During
1991, Mr. Daimler and Ms. Mondragon sold the remainder (i.e., 34
percent) of the Building (1991 sale) for $39,000. At the time of
that sale, their basis in that portion of the Building and land
was $32,551. They failed to include the gain ($39,000 minus
$32,551, or $6,449) that they realized on the 1991 sale in their
joint return for 1991.
Mr. Daimler and Ms. Mondragon personally financed the
November 1, 1989 sale of the Building. They financed a $12,500
downpayment for 12 months at 10 percent interest ($12,500 note)
and the remainder of the $75,500 sales price (i.e., $63,000) for
15 years at 10 percent interest ($63,000 note). The payments on
both of those notes began in November 1989. The $12,500 note was
paid off during 1990. In December 1990, Mr. Daimler and Ms.
Mondragon sold the $63,000 note. Mr. Daimler and Ms. Mondragon
failed to include interest income associated with the foregoing
two notes in the amounts of $1,248.77 for 1989 and $6,669.41 for
1990 in their respective joint returns for those years.
In 1991, Mr. Daimler and Ms. Mondragon personally purchased
a new building to house the place of business of Dieter Electron-
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011