- 23 -
petitioner sold his interest in M&V Investments on April 27,
1990. Respondent calculated petitioner’s income from the sale of
M&V Investments for 1990, using the specific items method of
income reconstruction. To the extent that petitioner deposited
proceeds from this sale to bank accounts over which he had
signatory authority, those deposits were treated as nontaxable in
respondent’s bank deposits analysis.
Respondent calculated petitioner’s basis and gain on the
sale of the interest as follows:
Calculation of Adjusted Basis Newark WreckersTri-City
Original cost $25,000 $75,000
Addl. Capital Contributed
or Withdrawn
1987 -- 5,000
1988 -- (5,000)
1989 -- 110,231
1990 -- (2,667)
Petitioner’s Share of Pship. Income/(Loss)
1987 -- (22,603)
1988 -- (78,505)
1989 -- (115,377)
1990 -- (5,881)
1990 (stipulation)1 41,105
Subtotal 25,000 1,303
Petitioner’s share of pship. debt 2101,000
Adjusted basis 25,000 102,303
Total combined basis 127,303
Calculation of Amount
Description of Item Recognized on Sale
Cash from Viviano $200,000
Relief from pship. debt 101,000
Total amount realized 301,000
Less total basis (127,303)
Amount recognized 173,697
Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 NextLast modified: May 25, 2011