- 2 -
property, referred to hereafter as the Foxbriar property; (2)
whether petitioners are entitled to a casualty loss deduction
under section 165(a) for the year 1991 with respect to the
Foxbriar property; and (3) whether, for 1991, petitioners are
entitled to a nonbusiness bad debt deduction under section 166(a)
in connection with the Foxbriar property.1
Some of the facts were stipulated, and those facts, with the
annexed exhibits, are so found and are incorporated herein by
reference. At the time the petition was filed, petitioners'
legal residence was Cibolo, Texas.
Prior to the years at issue, William S. Hewitt and his wife,
Peggy L. Hewitt (the Hewitts), were owners of residential real
property known as the Foxbriar property, which was located at
Cibolo, Texas. On May 20, 1990, petitioners entered into an
earnest money contract with the Hewitts for the purchase of the
Foxbriar property. The earnest money contract contained a lease
option addendum (the lease option), pursuant to which petitioners
began occupying the Foxbriar property on June 25, 1990, as
lessees.
Under the lease option, petitioners were to pay to the
Hewitts $1,000 per month for 1 year, commencing July 1, 1990, and
ending June 30, 1991. Of each $1,000 monthly payment, $250 would
1 Unless otherwise indicated, all section references are
to the Internal Revenue Code in effect for the years at issue.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011