- 9 -
$20,513.68, and (2) the remaining balance of $5,196.53 on the
Fredy Fourby loan guaranty, resulting in a net "contract value"
of $736,029.79.
Pursuant to the DMAA and the divorce decree,
Farmers made the following “contract value” payments during
taxable years 1995 and 1996:
Orin Gloria
Farnsworth Farnsworth Total
Mar. 2, 1995 $161,780.38 $83,562.88 $245,343.26
July 31, 1995 161,780.38 83,562.88 245,343.26
Jan. 31, 1996 161,780.39 83,562.88 245,343.27
Total 485,341.15 250,688.64 736,029.79
Petitioners reported a taxable gain of $263,156 on Form
4797, Sales of Business Property, and Form 6252, Installment Sale
Income, attached to their Form 1040 for taxable year 1995.
Petitioners reported the total gross “contract value”, amounting
to $761,740, which amount included: (1) All payments made to Mr.
Farnsworth in taxable years 1995 and 1996; (2) all payments made
to Orin Farnsworth's former wife, Gloria Farnsworth; (3) the
canceled credit union loan valued at $20,513.68, which was offset
by Farmers; and (4) the Fred Fourby loan guaranty of $5,196.53,
which was also offset by Farmers.
Petitioners reduced the gross “contract value” of $761,740
by $373,560 for “cost or other basis of property sold”. The
“cost or other basis” claimed by petitioners consisted of the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011