James V. Abrams and Laurie Abrams - Page 11




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               Petitioners’ claim of a distressed sale is unpersuasive                
          because at all relevant times they did not receive any offers for           
          the Stewart property.  Even assuming arguendo that petitioners              
          sold under distress, the record demonstrates that there was not a           
          willing buyer at any time between June through November 1995 when           
          the property was listed from $484,900, to $469,000, then                    
          $459,000, and finally $435,000, which petitioners contend is a              
          price far below the purported FMV of $480,000.  Both Mrs. Abrams            
          and Mr. Lilly also testified that in 1995 real estate values were           
          at their lowest levels especially for high-end homes.  However,             
          Mr. Lilly testified that a house similar to the Stewart property            
          would have likely sold in a 6-month period of time if it were               
          listed at its FMV.  The fact that the property would not sell for           
          $435,000 in November 1995 and that it did sell for $435,000 in              
          December 1996 indicates that the Stewart property was worth at              
          least as much in 1996 as it had been in 1995.  Thus, we do not              
          find that the sales price of $435,000 was the result of a                   
          distressed sale.  See Adams v. Commissioner, supra (held that the           
          property’s sales price was below FMV because the taxpayer was               
          under a threat of foreclosure, was 2 years behind in paying                 
          property taxes and the buyers were taking subject to an existing            
          lease on the property).                                                     
               Further, petitioners bear the burden to prove what the FMV             
          of the property was in July 1995.  Petitioners did not obtain an            






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