Facts
Taxpayers borrowed $1,851,500 on a non-recourse basis to build an apartment complex.
When their basis in the property was $1,455,740 (after their invested capital of $44,212 and deductions taken in the amount of $439,972), they sold it for no consideration other than the assumption of the non-recourse liability.
The fair market value of the property at the time of sale was $1,400,000, so they claimed a loss of $55,740. The Tax Commissioner insisted instead that they actually realized a gain of $400,000; the difference between the principal amount of the debt and their basis.
Read more about this topic: Commissioner V. Tufts
Famous quotes containing the word facts:
“A judge is not supposed to know anything about the facts of life until they have been presented in evidence and explained to him at least three times.”
—Parker, Lord Chief Justice (1900–1972)
“Live in contact with dreams and you will get something of their charm: live in contact with facts and you will get something of their brutality. I wish I could find a country to live in where the facts were not brutal and the dreams not real.”
—George Bernard Shaw (1856–1950)
“Science is built up with facts, as a house is with stones. But a collection of facts is no more a science than a heap of stones is a house.”
—Jules Henri Poincare (1854–1912)