- 25 -
2000. The notice contained the following computations of such
increases:
1999 Sale of Lot 5
Contract price 318,000
Reduction (47,700) §108(e)(5)[20]
Selling costs (19,398)
Selling price 250,902
Basis (119,425)
Gain $ 131,477.00[21]
2000 Sale of Lot 12
Contract price 225,000
Reduction (45,000) §108(e)(5)[22]
Selling costs (8,475)
Selling price 171,525
Basis (54,361)
Gain $ 117,164.36[23]
[Reproduced literally.]
Respondent further determined in the notice that petitioners are
liable for each of their taxable years 1999 and 2000 for the
20Respondent made the $47,700 adjustment under sec.
108(e)(5) to reflect that petitioners forgave the second loan
with respect to lot 5.
21The parties agree that if the Court were to sustain re-
spondent’s determination that the December 2, 1999 transaction
constitutes a sale of lot 5 by petitioners, the gain resulting
from that sale must be calculated by using the correct amount of
petitioners’ adjusted basis in that lot, i.e., $168,494.
22Respondent made the $45,000 adjustment under sec.
108(e)(5) to reflect that petitioners forgave the second loan
with respect to lot 12.
23The parties agree that if the Court were to sustain re-
spondent’s determination that the June 14, 2000 transaction
constitutes a sale of lot 12 by petitioners, the gain resulting
from that sale must be calculated by using the correct amount of
petitioners’ adjusted basis in that lot, i.e., $52,466.
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Last modified: November 10, 2007