Edward C. Tietig - Page 30




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                              iii.  Past Due Taxes and Interest                       
               In determining the amount realized by petitioner upon                  
          foreclosure of the Miami property, the notice of deficiency did             
          not include past due taxes of $14,386.85 and interest of                    
          $47,944.02.  This is a new matter upon which respondent has the             
          burden of proof.  Rule 142(a).                                              
               Petitioner asserts in his petition that the principal                  
          balance of $206,044.77 at the time of foreclosure represents the            
          total consideration for purposes of determining gain or loss.               
          However, petitioner appears to have abandoned this argument on              
          brief.  Indeed, petitioner in an exhibit contained in his reply             
          brief under the heading “Calculation of Foreclosure Loss” treats            
          the $47,944.02 of past due interest and the $14,386.85 in past              
          due taxes as amounts realized.  Petitioner does not argue, in               
          either his opening or rely brief, that these items should not be            
          included in the amount realized.  We find that the amount                   


               30(...continued)                                                       
               Respondent then adjusted petitioner’s cost basis of $126,260           
          as follows:                                                                 
               Cost basis                         $126,260.00                         
               Depreciation already claimed                                           
               (1985 Form 1120S)                  (16,555.04)                         
               Allowable depreciation not claimed                                     
               between 1986 and 1991              (42,084.00)                         
               Petitioner’ adjusted basis    67,620.96                                
               We note that respondent, in adjusting petitioner’s basis by            
          $16,555 for depreciation already claimed, rounded to the nearest            
          dollar.  We have added 4 cents to respondent’s figure for                   
          consistency.                                                                





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