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Respondent determined a deficiency in petitioners’ Federal
income tax for the taxable year 1996 in the amount of $9,726.
The only issue for decision is whether petitioners sustained
a deductible loss under section 165 on the sale of their former
residence. We hold that they did not.
An adjustment to the amount of petitioners’ allowable rental
loss deduction under section 469 is a purely computational
matter, the resolution of which is dependent on our disposition
of the disputed issue.
Background
Some of the facts were stipulated, and they are so found.
Petitioners, who are married, resided in Modesto, California, at
the time that their petition was filed with the Court.
At all relevant times, petitioner James V. Abrams (Mr.
Abrams) was employed as a district manager by Stewart Title Co.
Petitioner Laurie Abrams (Mrs. Abrams) has more than 20 years of
experience as a mortgage lender and listed her occupation as
“property manager” on petitioners’ joint Forms 1040, U.S.
Individual Income Tax Return, for the taxable years 1995 and
1996.
In March 1991, petitioners purchased a house located at 504
Stewart Road, Modesto, California (Stewart property), for
$484,950. The Stewart property is approximately 4,200 square
feet with four bedrooms, three baths, and a 1,000 square foot
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