Robert Lee and Rebecca Waters - Page 13

                                       - 12 -                                         
          business during the redemption period).                                     
               When the redemption period expires, both legal title and the           
          right to possession vest in the purchaser.  Mich. Comp. Laws Ann.           
          sec. 600.3236 (West 2000); Bankers Trust Co. v. Rose, 322 Mich.             
          256, 259 (1948); Shelby Co. v. Dickinson, 259 Mich. 197, 198                
          (1932).  Possession of the property by the mortgagor after the              
          redemption period expires is unlawful, and no notice to quit is             
          necessary.  Shelby Co. v. Dickinson, supra.                                 
               In view of the foregoing, it is clear that upon the                    
          expiration of the 6-month redemption period on December 27, 1996,           
          petitioner no longer had any ownership right or possessory                  
          interest in the Hazelwood property.  Equally clear is the fact              
          that any delay by First Independence to take actual possession of           
          the property is without legal consequence.  Thus, by virtue of              
          Michigan law, any loss that petitioner may have sustained from              
          the foreclosure on the Hazelwood property was sustained in 1996,            
          the year in which petitioner’s equity of redemption was                     
          extinguished.  See sec. 1.165-1(d)(1), Income Tax Regs; see also            
          sec. 1.165-1(b), Income Tax Regs.                                           
               5.  Conclusion                                                         
               Because no loss was sustained in 1997, the only taxable year           
          before the Court, we hold that the deduction in issue is not                
          allowable for that year.                                                    

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  Next

Last modified: May 25, 2011