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debt in excess of the fair market value of the property is not
used to calculate the amount realized from a sale under section
1001(b). See 2925 Briarpark, Ltd. v. Commissioner, supra at 318
n.2; Marcaccio v. Commissioner, supra.
Respondent contends that petitioner realized at least
$114,000 in the 1985 foreclosure sale of the Citrus County
Property. He relies upon petitioner’s position in the deficiency
judgment proceedings that the fair market value of that property
was at least $114,000 at the time of the foreclosure sale. We
cannot agree that respondent has established that the fair market
value of the Citrus County Property was at least $114,000 on the
date of the foreclosure sale. The Orange County Circuit Court
found that the Citrus County Property had a fair market value of
$87,000 at the time of the foreclosure sale. The court gave
petitioner credit for $87,000 and then entered a deficiency
judgment of $20,834 against petitioner, which represented
petitioner’s remaining personal liability as guarantor. Although
final judgment was stayed for the introduction of additional
evidence as to fair market value, no such evidence appears to
have been submitted, and, in any event, the parties settled the
matter and Freedom filed a Satisfaction of Judgment stating that
the $20,834 deficiency judgment had been satisfied. We find that
the fair market value on the date of the foreclosure sale was
$87,000, the amount determined by the Circuit Court.
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