- 5 -
Some time after 1984, the $25,000 loan with Tri-Counties
Bank was converted to a "line of credit" with Bank of America in
Mr. Blake's name. As of 1996, the amount Mr. Blake owed on the
Bank of America line of credit was still unpaid.
In 1996, Mr. Blake took out a mortgage on his home in the
amount of $30,000. Before this mortgage, Mr. Blake had owned the
home free and clear of any debts or encumbrances since he had
purchased it in 1993.
Mr. Blake and Bank of America agreed: (a) That $14,832 of
the $30,000 mortgage would be applied against the line of credit
which Mr. Blake owed to Bank of America; (b) that $6,664 of the
$30,000 mortgage would be applied against a VISA account held by
petitioner and her father with Bank of America; and (c) that Bank
of America would forgive $5,7353 of debt owed by Mr. Blake to
Bank of America.
Petitioner and her father both lived in the home from
January 1998 through August 1998 when Mr. Blake died.
Petitioner inherited the house and has continued to live there
since her father's death.
Petitioner made all of the mortgage payments on the home
during 1998 and 1999, but the mortgage account remained in her
father's name. The interest portions of the mortgage payments
3Bank of America reported to the I.R.S. that, for the 1996
tax year, Mr. Blake had $5,735 of income from debt cancellation.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011