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residence with encumbrances totaling $408,000. But petitioner’s
mortgage statements show that her principal residence is
encumbered only to the extent of $387,811.39, giving her
potential equity of $22,188.61.
At trial, petitioner testified that a silent third party,
her parents, gave her the money to acquire the second home to
“share in the equity”, so they encumbered the residence to the
extent of $22,000. But petitioner also testified that title to
the property was held in her name only, and she failed to offer
any evidence proving her parents’ interest, other than her self-
serving testimony. Petitioner also did not offer any evidence of
the properties’ current values to support her valuations.
Substantiation of her parents’ interest and the properties’
values is crucial in view of the $22,188.61 in potential equity.4
Additionally, it is difficult to find that the economic
hardship factor weighs in favor of relief in view of the fact
that petitioner used moneys received after her divorce to acquire
items with her second husband (i.e., new cars/second home) rather
than satisfying her Federal tax liabilities. The Court is also
disturbed by the fact that petitioner has not sought repayment
from Mr. Nakasu for his alleged misappropriation of the proceeds
received from the sale of their marital home.
4 Although the rental property is currently rented with a
negative cashflow, there exists the possibility that the property
can be rented for profit or sold at a gain.
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Last modified: March 27, 2008