- 2 - Respondent determined a deficiency in petitioners’ Federal income tax of $8,809 for the taxable year 1995. The issue for decision is whether petitioners are required to include in income capital gain realized from the sale of their personal residence.1 Some of the facts have been stipulated and are so found. The stipulations of fact and the attached exhibits are incorporated herein by this reference. On October 30, 1995, petitioners sold their residence on Pod Drive in Vista, California (Pod residence), for $310,000. Petitioners reported a gain of $30,282 on the sale of this residence on their 1995 joint Federal income tax return. However, they reported that they planned to replace the home within 2 years and therefore did not include the gain in income on the 1995 return. On May 2, 1996, petitioners purchased a vacant lot on Robinhood Road in Vista, California (Robinhood property), for $111,000. On July 7, 1997, petitioners entered into a contract for the construction of a residence on this property. Petitioners were obligated to pay $388,987 under this contract. On August 20, 1997, petitioners borrowed $428,000 to finance the construction of the new residence. 1Adjustments made to itemized deductions claimed by petitioners are computational and will be resolved by the Court’s holding on the issue in this case.Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011