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Petitioner and Mr. Conner separated in early 1996, and a
Judgment of Dissolution of Marriage was subsequently entered by
the Circuit Court for McHenry County, Illinois, on April 13,
1999.
On May 21, 2001, respondent sent Mr. Conner an individual
notice of deficiency for his 1997 Federal income tax. Respondent
determined Mr. Conner’s deficiency based on a failure to report
income from a long-term capital gain arising from the execution
of a deed in lieu of foreclosure transaction.
Respondent determined Mr. Conner’s correct tax liability for
1997 by calculating the income incurred by the aforementioned
transaction as follows:2
Form 1099-C - Cancellation of Debt $260,883.00
Form 1099-C - Cancellation of Debt 68,161.59
Total Cancellation of Debt 329,044.97
Amount Realized (Section 1001) 329,045.00
Adjusted Basis in Property (239,000.00)
Total Amount Realized 90,045.00
Mr. Conner’s share (50%) 45,023.00
Mr. Conner filed a petition with this Court at docket No.
9969-01. After this Court sustained respondent’s determination,
Mr. Conner entered into a payment plan with respondent to pay his
outstanding 1997 Federal income tax liability. He continues to
make payments in accordance with this plan.
2 Some of these figures have been rounded.
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Last modified: November 10, 2007