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Respondent determined a deficiency in petitioner’s Federal
income tax of $35,230 for the taxable year 1995.
The issue for decision is whether petitioner made a valid
election under section 453(d) not to report the sale of a
residence using the installment method.
Some of the facts have been stipulated and are so found.
The stipulations of fact and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
Byron, California, on the date the petition was filed in this
case.
Petitioner and her former husband, Joseph Bokman, were
divorced in 1986. Petitioner purchased a residence in Byron,
California, on March 23, 1993. She then sold a joint tenancy
interest in this residence to Mr. Bokman on May 17, 1995. Mr.
Bokman received this interest in exchange for a secured note
requiring him to pay petitioner $2,083.33 a month in interest for
a period of 10 years, followed by the payment of the principal
amount of $250,000. Payment of interest was to commence on
January 1, 1996. The note was secured using a deed of trust on
Mr. Bokman’s interest in the residence. Mr. Bokman made the
following payments during 1996:
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