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The sole issue in dispute concerns the amount of commission
income petitioner must report as taxable income in 1996.
FINDINGS OF FACT
Some of the facts have been stipulated and are found
accordingly. The stipulation of facts and the exhibits submitted
therewith are incorporated herein by this reference.
At the time petitioner filed her petition contesting
respondent’s determinations, she resided in Newtown, Pennsylvania.
From 1990 to the year at issue, petitioner was a mortgage loan
officer for a bank. From mid-1994 to 1997, petitioner also worked
part time as a real estate broker for the M. Riccardi Agency, owned
by Michael Riccardi (Mr. Riccardi).
Before November 14, 1994, petitioner and her spouse owned, and
occupied as their residence, property located at 227 Aspen Road,
Yardley, Pennsylvania (the Aspen Road property). In 1994,
petitioner and her husband encountered financial problems, and the
bank holding the mortgage on the Aspen Road property threatened to
foreclose on the property. As a consequence thereof, petitioner
approached Mr. Riccardi and suggested that he purchase the Aspen
Road property from the bank holding the mortgage. Mr. Riccardi
agreed to do so. He made an offer to purchase the Aspen Road
property for $150,000; the bank rejected this offer. Thereafter,
the bank foreclosed on the Aspen Road property, and the property
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