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petitioner is entitled to relief from joint liability under
section 6015(c) with respect to this item.
II. Capital Gain from the Sale of Real Property
A. Background
From late 1984 until May 1987, petitioners lived in Osceola
County, Florida, and resided at certain property known as Lots 22
and 27. Petitioners eventually purchased Lots 22 and 27 and the
property was titled jointly in their names.
On May 11, 1987, petitioners sold lots 22 and 27 to Harry
and Shelby Justice for a total sale price of $367,900.
Petitioners’ basis in the property at the time of the sale was
$310,000, and the commission paid on the sale was $25,753. The
gain on the sale was $32,147. In connection with the sale, a
check for $89,210.53 representing the proceeds of the sale was
issued payable to “John A. & Donna L. Rowe”. Petitioner signed
the settlement statement for the property and endorsed the
check.10 The check was deposited into petitioners’ NCNB account
on May 11, 1987. Petitioners’ 1987 Federal income tax return
listed a capital gain of $30,159. The capital gain reported on
the return did not include any portion of the $32,147 gain from
the sale of Lots 22 and 27.
10Petitioner’s name is signed “Donna L. Rowe” on the
settlement statement and the check.
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