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The above improvement costs claimed by petitioners are
reflected either in various building permits obtained by
petitioners (Appendix A), in other contemporaneous records
maintained by petitioners (Appendix B), or in petitioners’
testimony at trial (Appendix C).2 The $56,284 in improvement
costs that respondent has allowed are based on the costs that are
reflected in the building permits (Appendix A) and on some but
not all of the costs reflected in the contemporaneous records
(Appendix B). Also, a few additional costs that respondent has
allowed are reflected in Appendix D. Respondent has disallowed
all of the costs reflected in Appendix C.
Further, in connection with the sale of their residence,
petitioners incurred closing costs of $61,864.
In summary, petitioners and respondent calculate
petitioners’ cost basis in the residence as follows:
Calculation of
Cost Basis in Residence
Petitioners Respondent
Purchase price $ 45,000 $ 45,000
Improvements 286,070 56,284
Closing costs 61,864 61,864
Total $392,934 $162,968
2 For purposes of the above schedule, where the various
sources of evidence in the case reflect different amounts for the
same improvement, the schedule reflects the higher amounts.
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Last modified: May 25, 2011