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In 1987, certain real property (Anorada property) was
purchased in the names of petitioner and Mr. Rowe.11 On
September 30, 1988, the Anorada property was sold to Mohamed and
Nabila Mohamed for a total sale price of $25,000. Before the
sale, the property was titled jointly in the names of petitioner
and Mr. Rowe. The basis in the Anorada property at the time of
the sale to the Mohameds was $20,000, and the commission paid on
the sale was $2,500. The gain on the sale was $2,500. In
connection with the sale, a check for $13,552.31 representing the
sale proceeds was issued payable to “John Rowe and Donna Rowe”.
Petitioner’s name is signed on both the settlement statement and
the check.12 The check was deposited into petitioners’ NCNB
account on September 30, 1988. Petitioners’ 1988 return listed a
capital gain of $20,695. The capital gain reported on the return
did not include the $2,500 gain from the sale of the Anorada
property.
B. Discussion
1. Allocation of Items
Petitioner argues that Mr. Rowe’s secretive nature regarding
his personal and financial activities supports allocating these
11Copies of a deed and a settlement statement list
petitioner and Mr. Rowe as the purchasers of the Anorada
property; however, neither petitioner’s nor Mr. Rowe’s signature
appears on the copies of the documents.
12Petitioner’s name is signed “Donna Rowe” on the settlement
statement and check.
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