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After concessions, the primary issues for decision are:
1. The adjusted basis of a rental property located at 3435
South 116th East Avenue in Tulsa, Oklahoma (the 116th East Ave.
property), immediately after petitioners acquired it in a section
1031 like-kind exchange in 1994. Determination of this issue is
dispositive of the depreciation deduction allowable with respect
to the property for taxable year 1995 and of the amount of loss
petitioners realized on their sale of the property in taxable
year 1996; and
2. whether for taxable years 1995 and 1996, petitioners are
liable for accuracy-related penalties pursuant to section
6662(a).
Section references are to the Internal Revenue Code in
effect for the relevant tax years. Rule references are to the
Tax Court Rules of Practice and Procedure.
FINDINGS OF FACT
The parties have stipulated some of the facts, which are so
found. The parties’ stipulation of facts and the associated
exhibits are incorporated herein by this reference.
Petitioners
At all times relevant to this proceeding, petitioners were
married. J. Clark Bundren is a medical doctor practicing in the
fields of obstetrics/gynecology and infertility. When
petitioners filed their petition, they resided in Tulsa,
Oklahoma.
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