- 18 - Sale price $334,000 Closing costs (20,300) Amount realized $313,700 Purchase price 87,900 Closing costs 1,214 Improvements 153,435 Cost basis $242,549 Depreciation allowed 1992 3,455 1993 3,455 1994 2,827 Total (9,737) Deferred gain from sale of Virginia house Sale price 70,000 Cost (57,000) Closing costs (3,000) Deferred gain (10,000) Adjusted basis (222,812) Gain on sale 90,888 Respondent increased petitioner’s cost basis in the New Jersey house by $153,435 for improvements petitioner made to the house. Respondent included in the improvements to the New Jersey house $20,000 petitioner established he incurred in 1984 for modifications to the kitchen. Petitioner asserts that he spent $22,500 for modifications to the kitchen of the New Jersey house. Respondent’s determinations are presumed to be correct and petitioner bears the burden of proof on all issues in these cases.9 See Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 9Sec. 7491, which is effective for court proceedings arising in connection with examinations commencing after July 22, 1998, shifts the burden of proof to the Commissioner in certain circumstances and places on the Commissioner the burden of production with respect to penalties and additions to tax. Sec. 7491 is inapplicable in these cases because the examination of petitioner and Mrs. Wood’s returns commenced in December 1997.Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
Last modified: May 25, 2011