- 37 -
Respondent was unable to locate any record showing that an
estate tax return had been filed on behalf of Frank or Katherine.
G. Capital Gain for 1989
Frank and Katherine reported a long-term capital gain on
their joint Federal income tax return for 1989 from the sale of a
lot (lot). They calculated that gain as follows:
Sales price $40,000
Basis 36,579
Gain from sale 3,421
Frank conveyed the lot to Russell A. Sachs (Sachs) by
warranty deed dated March 20, 1989. The settlement statement
relating to the sale of the lot to Sachs shows that $11,033 of
the $40,000 sales price was used to pay off a mortgage loan. The
settlement statement also shows expenses of the sale of $4,990.
Frank had acquired his interest in the lot from a
Patricia A. Johnson (Patricia)18 on March 18, 1989, by means of a
quitclaim deed. The quitclaim deed stated that the transfer was
for no consideration.
Patricia had acquired her interest in the lot with John M.
Johnson (John) for $25,000 on April 6, 1979, from Charles and
Annie Mobley (Mobleys) pursuant to an Articles of Agreement which
specified that title would not be conveyed until after payment of
the $25,000 purchase price. By quitclaim deed John transferred
18 The record does not reveal whether Patricia A. Johnson
was Frank and Katherine’s daughter Patricia or an unrelated party
with the same name.
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