Donald DeCleene and Doris DeCleene - Page 13

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               Petitioners' 1993 return includes a Form 8824, Like-Kind               
          Exchanges, which states that petitioners exchanged “land and                
          building” for “land and building”.  The return discloses no other           
          facts regarding the transactions between petitioner and WLC.                
               Respondent used petitioner’s $59,831 adjusted basis figure             
          for the McDonald Street property in computing the long-term                 
          capital gain on the sale of the McDonald Street property                    
          determined in the deficiency notice.  However, on audit of                  
          petitioners’ return, an adjusted basis of $61,331 had been                  
          established.  Respondent’s deficiency notice did not back out the           
          gain petitioners had reported on petitioner’s quitclaim transfer            
          of the unimproved Lawrence Drive property to WLC, notwithstanding           
          that, under respondent’s theory of the case, the Lawrence Drive             
          property has never been disposed of by petitioner.                          
               On April 29, 1998, Bank One, Green Bay, WLC, and petitioner            
          executed an amendment to the Assumption, Release and Escrow                 
          Agreement.  The amendment recites that the original of that                 
          agreement contained a scrivener’s error, and recites that WLC               
          would pay petitioner $142,400 “in satisfaction of the Note and              
          Mortgage” on the Lawrence Drive property, that the Lawrence Drive           
          Property “is exchanged per the Exchange Agreement” for the                  
          McDonald Street property, that petitioner will use $100,000 of              
          the $142,400 received from WLC to pay petitioner’s $100,000 note            

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