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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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