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Cochran determined that petitioners’ net realizable equity
in each of their reported assets was the same as its reported
value, except she reduced the reported value of each vehicle by
20 percent.6 Cochran summarized petitioners’ assets and
liabilities as follows:
Fair Quick Net
market sale realizable
Assets value value Encumbrance equity
Cash $3,528 -- -- 3,528
Investments 3,438 -- -- 3,438
Cash value of life insurance 22,771 -- -- 22,771
Vehicles:
1989 Pontiac LE 225 180 -- 180
1997 Chevrolet Scottsdale 500 400 -- 400
1999 Buick LeSabre 3,860 3,080 7,236 -0-
2000 BMW motorcycle 3,500 2,800 –- 2,800
Home 89,000 -- -- 89,000
Other real property 17,500 -- –- 17,500
144,322 6,460 7,236 139,617
As to the reported expenses, Cochran accepted all of those
expenses except for the $500 “other expense” which petitioners
failed to substantiate as to either its source or amount.7
Cochran determined that petitioners’ monthly excess income (i.e.,
monthly income less monthly expenses) was $501 ($4,707 - ($4,706
- $500)), that petitioners’ income potential for the next
6 Cochran noted that the reported values of petitioners’
home and other real property were ascertained from their assessed
values and not from appraisals or current market prices, which
could be higher. Cochran also was told by petitioners that they
had ascertained the value of each vehicle by using its trade-in
value and considering its condition to be “fair”.
7 Cochran allowed petitioners’ medical expenses in full,
although she considered the amount to be greater than average.
Cochran noted that petitioners’ 2003 Federal income tax return
claimed a deduction for $8,641 of medical expenses that they paid
during that year.
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Last modified: May 25, 2011