- 7 -
amount realized on the sale, respondent subtracted $60,516 from
the sale price to account for selling costs. Using an adjusted
sale price of $1,004,484 and an adjusted basis of $433,066,
respondent concluded that petitioner must recognize gain of
$571,418 on the sale of the Rose Point Lane property.
Respondent did not include any of the following expenses,
which petitioner claims should increase the adjusted basis of the
Rose Point Lane property, in computing petitioner’s gain:8
Item Cost
Landscaping and repairs $21,750
Maintenance for 100 mos. at $150/mo. 15,000
Refinancing expenses (three times) 26,500
Mortgage interest 325,100
Insurance for 100 mos. 11,150
Property taxes for 100 mos. 104,167
Personal labor of 1500 hrs. at $20/hr. 30,000
Settlement charges for utilities 200
Respondent concluded that the costs petitioner allegedly incurred
for landscaping and repairs, maintenance, utilities, and personal
labor did not constitute capital improvements that must be added
to the property’s basis. Respondent disallowed any basis
7(...continued)
costs and adjusted the sale price downward by $11,333 to account
for disposition costs.
8In the petition, petitioner claimed he incurred improvement
expenses of $75,000, but he did not argue in his trial
memorandum, at trial, or in his posttrial memoranda that he was
entitled to any deductions or basis adjustments for improvements.
Petitioner also failed to produce any evidence on this point at
trial. We conclude, therefore, that petitioner has abandoned
this argument. See Leahy v. Commissioner, 87 T.C. 56, 73-74
(1986).
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