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an adjusted sale price of $225,043 and an adjusted basis of
$191,405, respondent concluded that petitioner must recognize
gain of $33,638 on the sale of the Hollywood Hill lot.
Respondent did not include the following expenses, which
petitioner claims should increase the adjusted basis of the
Hollywood Hill lot, in computing petitioner’s gain on the sale:11
Item Cost
Settlement charges for property taxes due $4,582
Maintenance for 43 mos. at $100/mo.1 4,300
Personal labor of 430 hrs. at $20/hr. 8,600
Property taxes for 43 mos. 6,987
1According to petitioner, the maintenance performed on the
Hollywood Hill lot was routine, such as mowing, and was not part
of the development of the property for ultimate resale.
Respondent disallowed any deduction or basis adjustment for the
11In the petition, petitioner also claimed expenses of
$31,500 for mortgage interest and $12,000 for “improvements”, but
he did not argue that he was entitled to any deductions or basis
adjustments for these expenses in his trial memorandum, at trial,
or in his posttrial memoranda. We conclude, therefore, that
petitioner has abandoned these arguments. See Leahy v.
Commissioner, supra.
Petitioner argued for the first time at trial that in
addition to the cost of the fence, which respondent added to the
property’s adjusted basis, he expended approximately $7,000 for
the services of the engineer who designed a septic system for the
Hollywood Hill lot, which was never installed. Petitioner
offered no documentary evidence to substantiate the expense, did
not otherwise amend his petition to reflect any change in the
nature or amount of the expenses he claims, and did not present
any arguments regarding the expenses in his posttrial memoranda.
As a result, we do not consider petitioner’s argument.
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