- 2 -
other court, and this opinion shall not be cited as precedent for
any other case.
Respondent determined a $12,448 deficiency in petitioners’
2002 Federal income tax and imposed a $2,490 section 6662(a)
accuracy-related penalty. The issues for decision are: (1)
Whether petitioners realized cancellation of indebtedness income
as a result of a foreclosure proceeding involving their
residence; and, if so (2) whether the underpayment of tax
required to be shown on petitioners’ 2002 Federal income tax
return is a substantial understatement of income tax.
Background
Some of the facts have been stipulated and are so found.
Petitioners are married to each other. Their joint 2002 Federal
income tax return was timely filed. At the time the petition was
filed, they resided in Pennsylvania.
In 1994, petitioners purchased a parcel of land in
Tobyhanna, Pennsylvania, for the purpose of constructing a house
to be used as the family residence (the property). Petitioners
financed the purchase of the land and/or the construction of the
house through a $118,825 loan (the loan) from America’s Wholesale
Lender, now know as Countrywide Home Loans, Inc. (Countrywide).
The loan was evidenced by a note and secured by a mortgage on the
property, each dated September 2, 1994.
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: March 27, 2008