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Court, the latter court dismissed the petition on the ground that
the relief sought was within the exclusive jurisdiction of the
bankruptcy court. The Court of Appeals for the Ninth Circuit
reversed, holding that by lifting the automatic stay, the
bankruptcy court relinquished any subject matter jurisdiction it
had over the lessee’s right to seek reinstatement of the lease.
See id. at 861.5 Venue for an appeal of the instant case would
be the Ninth Circuit. We hold that the relief from stay as to
petitioner’s residence was an abandonment whereby the property
effectively reverted to petitioner. As a result, petitioner, and
not the bankruptcy estate, must take into account the tax
consequences of the foreclosure of petitioner’s residence.
b. Amount of Interest Deemed Paid
Petitioner asserts that because the fair market value of his
residence at the time of the foreclosure was higher than the
principal and interest due, he was deemed to have paid the
accrued mortgage interest in the foreclosure sale. Respondent
counters that the fair market value of petitioner’s residence was
less than the outstanding mortgage principal, and thus the
foreclosure produced no proceeds that could be allocated to an
interest payment.
5Moreover, in granting the relief from stay in the present
case, the bankruptcy court rejected petitioner’s argument that
his residence had equity which could be recovered by the estate.
See In re Olympia Holding Corp., 161 Bankr. 524, 528 n.4 (M.D.
Fla. 1993) (a bankruptcy court loses jurisdiction over property
upon the lifting of the stay “when there is no possibility a
surplus will remain”).
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