5
received, one-half of the net equity from the Arden Road house),
to obtain a loan from Park National Bank. The statement said
that petitioner owned a 50-percent interest in the Arden Road
house, that he acquired it in November 1969, and that it was
subject to an $18,000 mortgage.
E. Sale of the Arden Road House
Mrs. Suhr sold the Arden Road house for $155,000 on July 27,
1994. Mrs. Suhr signed the Seller’s Affidavit and Survivorship
Deed, and Mrs. Suhr and petitioner each signed an Addendum to
Sales Contract, Agency Disclosure Statement, and Addendum to
Inspection Clause. State Savings Bank released petitioner and
Mrs. Suhr from the mortgage September 12, 1994, upon payment of
the $20,632.55 balance owed on the mortgage. Selling expenses
totaled $10,928.50.
Pursuant to the divorce decree, petitioner and Mrs. Suhr
each received $61,156.84 from the sale of the Arden Road house.
On July 27, 1994, Mrs. Suhr used the proceeds from the sale of
the Arden Road house to buy a house in Gahanna, Ohio, for
$112,900, and she thus was eligible for nonrecognition of gain
under former section 1034.
Discussion
A. Background
The issue for decision is whether petitioner must recognize
gain in 1994 from the sale of the Arden Road house. Generally, a
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