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capital loss of $186. The parties dispute the amount of gain
that petitioner should have recognized when the Miami property
was foreclosed and the amount of loss that petitioner should have
recognized when Eureka Field Nursery ceased doing business. We
address the gain on the Miami property first.
a. Miami Property
Respondent argues that petitioner realized a $90,720.25
long-term capital gain when the Miami property was foreclosed in
1991.
Petitioner does not dispute that relinquishment of the Miami
property by means of a foreclosure sale is treated as a sale or
exchange. Chilingirian v. Commissioner, 918 F.2d 1251 (6th Cir.
1990), affg. T.C. Memo. 1986-463. Petitioner does dispute: (1)
The percentage of gain or loss attributed to business versus
personal use; (2) petitioner’s basis in the structure; and (3)
whether real estate taxes and mortgage interest forgiven should
be part of the amount realized. We turn to petitioner’s
arguments in turn.
i. Business v. Personal Use
In the notice of deficiency, respondent determined that the
structure on the Miami property was used 59 percent in a trade or
business. Petitioner argues that the entire structure was used
in a trade or business despite the fact that he lived there.
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