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not file a 1994 return to report the $3,981.05 in interest income
he received in 1994. Petitioner did not personally perform any
research or other investigation to confirm his belief that he did
not realize a taxable gain on the sale of the Tryon Road property
or that he was not required to file a tax return for the 1994
taxable year.
Petitioner did not file a Federal income tax return for the
taxable year 1994 until November 30, 1998, after the Internal
Revenue Service had inquired why he had not filed a tax return.
On his 1994 Federal income tax return, petitioner reported
$3,981.05 of taxable interest and a capital loss of $453.59 from
the sale of the Tryon Road property. Petitioner calculated the
capital loss from the sale of the Tryon Road property by
increasing his cost basis in the Tryon Road property by
$103,203.22. The following is a summary of petitioner’s loss
calculation:
Sales price $175,018.13
Selling charges ( 4,756.51)
Adjusted sale price $170,261.62
Purchase price $ 65,092.99
Logging permit 50.00
Surveys 2,369.00
Adjusted basis $ 67,511.99
Preliminary gain $102,749.63
Payment to Ms. Olsen ( 103,203.22)
Reported loss on sale ($ 453.59)
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Last modified: May 25, 2011