- 43 -
realized from those transactions.28 Petitioner contends that Dr.
Gant owned 100 percent of East Lake Vista at the time of the
sales in 1986 and 1988. Petitioner argues that he and Dr. Gant
originally agreed to be 50-50 partners with respect to East Lake
Vista, but that Dr. Gant contributed the entire purchase price
and thus acquired a 100-percent ownership interest in the
property.
At trial, petitioner testified that, initially, he was to
receive a 50-percent interest in East Lake Vista, but because Dr.
Gant “put up all the money and wanted all the interest in the
property”, Dr. Gant “essentially owned all of it”. However,
petitioner’s testimony was not definitive and was indeed
speculative. It was also self-serving, and we do not agree that
he owned no interest in East Lake Vista at the time of the 1986
and 1988 sales. The documentary evidence of record shows that
28Respondent allocated basis of $3,191.83 to each acre in
East Lake Vista: Basis per acre ($3,191.83) = purchase price
($500,000)/acres purchased (156.65). Respondent determined
$41,775 as petitioner’s gain from the May 1986 sale: Gain
realized ($83,550) = sales price ($205,000) - selling costs
($22,503) - basis ($98,947 = 31 acres x $3,191.83); petitioner’s
gain ($41,775) = gain realized ($83,550) x petitioner’s ownership
interest (50 percent). Respondent determined $50,726 as
petitioner’s gain on the Dec. 16, 1986, sale: Gain realized
($101,452) = sales price ($215,181) - selling costs ($13,187) -
basis ($100,542 = 31.5 acres x $3,191.83); petitioner’s gain
($50,726) = gain realized ($101,452) x petitioner’s ownership
interest (50 percent). Respondent determined $19,522 as
petitioner’s gain on the 1988 sale: Gain realized ($39,045) =
sales price ($80,000) - selling costs ($9,005) - basis ($31,950 =
10.01 acres x $3,191.83); petitioner’s gain ($19,522) = gain
realized ($39,045) x petitioner’s ownership interest (50
percent).
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