- 15 -
The basis of property is determined by its cost. Sec. 1012;
Gandy v. Commissioner, T.C. Memo. 1997-532, affd. 199 F.3d 440
(5th Cir. 1999).
Respondent contends that petitioners have failed to
substantiate a cost basis in their residence above the $163,148
determined by respondent at trial and that petitioners therefore
in 2000 realized $126,852 in capital gain on the sale.6
With one exception noted below, we regard all of the costs
petitioners claim in excess of the $163,148 allowed by respondent
as not sufficiently substantiated. We do allow petitioners an
increase of $24,945 in their cost basis to reflect additional
swimming pool improvement costs that are reflected in
petitioners’ contemporaneous records (Appendix B). Respondent
himself has allowed all of the other costs reflected in Appendix
B, and evidence relating to the swimming pool is as credible as
the evidence relating to the other items allowed by respondent.
We believe petitioners’ contemporaneous records (Appendix B)
substantiate a $24,945 increase in the cost basis of the swimming
pool to a total swimming pool cost of $31,190.
The following schedule reflects our findings with regard to
petitioners’ cost basis in the residence at the time of its sale
in 2000:
6 The sale price of $790,000, less the $163,148 cost basis
respondent allows, less the $500,000 exemption, equals $126,852
in capital gain.
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011