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submitted a schedule of their assets and liabilities as of the
date the petition was filed (first joint net worth schedule).
The first joint net worth schedule listed the following assets
and liabilities:
Assets Value
Savings accounts and/or certificates $62,834
Checking accounts 24,000
Annuity 118,615
Investment in dealership 734,487
Real estate 7,354,000
Home furnishings 125,000
Total assets 8,418,936
Liabilities Value
Unsecured bank loans $71,028
Mortgages, trust deeds or
contracts payable 4,541,660
Total liabilities 4,612,688
The first joint net worth schedule listed the combined net worth
of petitioners to be $3,806,248. The first joint net worth
schedule did not list either Mr. Johnson's or Mrs. Johnson's
individual net worth.
Respondent filed an objection to petitioners' motion in
which respondent argues that petitioners' affidavit and first
joint net worth schedule are insufficient, and that petitioners
have failed to prove that they meet the net worth requirements.
Respondent contends that (1) petitioners did not itemize their
assets or provide their cost bases;5 (2) it is unclear whether
5 Although the term "net worth" is not statutorily defined,
the "acquisition cost" of the asset, rather than the fair market
value, should be used. See Swanson v. Commissioner, 106 T.C. 76,
(continued...)
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Last modified: May 25, 2011