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recognize gain on the sale of the Rose Point Lane property only
to the extent that its adjusted sales price exceeds the cost of
purchasing the residence adjacent to the Hollywood Hill lot.
Sec. 1034(a).
The adjusted sales price of the Rose Point Lane property was
$1,004,484, and the cost of purchasing the residence adjacent to
the Hollywood Hill lot was $548,794. See sec. 1034(b); secs.
1.1034-1(b)(3) and (4), (c)(4)(i), Income Tax Regs. The adjusted
sale price of the old residence exceeds the cost of purchasing
the new residence by $455,690. We conclude, therefore, that,
pursuant to section 1034, petitioner must recognize gain on the
sale of the Rose Point Lane property in the amount of $455,690.15
E. Conclusion
Petitioner has failed to produce any evidence to prove the
existence or amount of the expenses he argues should be added to
each property’s adjusted basis or to prove that respondent’s
revised adjusted basis calculations were in error. We conclude,
therefore, that upon selling the properties at issue petitioner
is not entitled to recover any expenses in excess of those
15Accordingly, petitioner’s basis in his new residence must
be reduced by $115,728, the amount of unrecognized gain on the
sale of the Rose Point Lane property. Sec. 1034(e). Because
petitioner did not sell the home next to the Hollywood Hill lot,
the unrecognized gain from the sale of the Rose Point Lane
property does not affect respondent’s conclusion that petitioner
must recognize gain of $33,638 on the sale of the Hollywood Hill
lot.
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