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After concessions by petitioner, this Court must decide
whether petitioner is liable for income tax on $61,983, her
distributive share of partnership income.
Some of the facts in this case have been stipulated and are
so found. Petitioner resided in Chicago, Illinois, at the time
she filed her petition.
Petitioner held a 5-percent interest in Sheridan Lake View
Partnership (Partnership). The Partnership was engaged in the
business of renting buildings.
On December 31, 1993, the Partnership entered into a
transaction where it sold a parcel of real estate commonly known
as 5050 North Sheridan Road, Chicago, Illinois (Sheridan), to
Steven and Craig Strange (the Stranges), and purchased two
parcels of real estate commonly known as 1101-03 West Pratt
Avenue, Chicago, Illinois (Pratt), and 3134-40 West Montrose
Avenue, Chicago, Illinois (Montrose), from the Stranges. The
sales price of the Sheridan property was $3,975,000, and the
purchase price of the Pratt and Montrose properties,
collectively, was $1,075,000. A substantial mortgage was assumed
by the Stranges.
For the taxable year 1993, Gerard Mader prepared the
Partnership’s tax return. The parties stipulated that the
Partnership return included a Form 8824, Like-Kind Exchanges, and
reported a gain in the amount of $1,239,660 from the sale of the
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