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In 1994, petitioner and Mrs. Wood entered into a contract to
sell the undeveloped land in Florida, but the buyer failed to
perform under the contract.
On April 29, 1994, petitioner and Mrs. Wood filed for
bankruptcy under chapter 11 of the Bankruptcy Code (chapter 11)
in the U.S. Bankruptcy Court for the Southern District of Florida
(the bankruptcy court). On May 9, 1994, petitioner and Mrs. Wood
sold the New Jersey house for $334,000. They incurred $20,300 of
expenses related to the sale. Allowable depreciation for the 3-
year period the house was rented totaled $9,737.
On September 13, 1994, the Internal Revenue Service (IRS)
filed with the bankruptcy court a proof of claim, claiming an
unsecured nonpriority claim of $2,200 and an unsecured priority
claim of $20,389.54.
On January 18, 1995, petitioner and Mrs. Wood filed with the
bankruptcy court their chapter 11 plan of reorganization.
Pursuant to the plan, the bankruptcy court retained jurisdiction
of the case until all payments and distributions called for under
the plan had been made. The plan noted that the Florida house
had been listed with a licensed realtor for sale for $994,900.
By order dated February 6, 1995, the bankruptcy court
confirmed the plan of reorganization. The order confirming the
plan proclaimed:
that, except as provided in the Plan, the individual
Debtors are discharged from any debt that arose before
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Last modified: May 25, 2011