Paul D. and Joyce E. Krause - Page 4

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          equals the selling price and includes the full face amount of any             
          installment obligations received in connection with the sale is               
          considered to have made an effective election that the                        
          installment sales provisions of section 453 are not applicable.               
          See sec. 15A.453-1T(d)(3)(i), Temporary Income Tax Regs., supra.              
          Generally, such an election is irrevocable and may only be                    
          revoked with the Secretary's permission.  See sec. 15A.453-                   
          1T(d)(4), Temporary Income Tax Regs., supra.  Here, petitioners               
          never applied to the Commissioner to have their election revoked              
          and to have real estate gains at issue taxed under the section                
          453 installment method.  Petitioners admittedly now seek the                  
          benefits of the installment method because a substantial section              
          179 expense claimed on their 1994 income tax return was                       
          disallowed; thus, they have been deprived of a deduction that                 
          would have substantially offset those gains.  Section 15A.453-                
          1(d)(4), Temporary Income Tax Regs., supra, provides generally                
          that an election not to have the installment method apply will                
          not be revoked when one of the purposes for the revocation is the             
          avoidance of Federal income taxes.  Stated another way, the                   
          election is not generally revocable where the taxpayer's desire               
          for the revocation is based on hindsight rather than foresight.               
          The Court, therefore, rejects petitioners' claim to have their                

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