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:
“News reports don’t change the world. Only facts change it, and those have already happened when we get the news.”
—Friedrich Dürrenmatt (1921–1990)
“I went to the woods because I wished to live deliberately, to front only the essential facts of life, and see if I could not learn what it had to teach, and not, when I came to die, discover that I had not lived.... I wanted to live deep and suck out all the marrow of life, to live so sturdily and Spartan-like as to put to rout all that was not life, to cut a broad swath and shave close, to drive life into a corner, and reduce it to its lowest terms.”
—Henry David Thoreau (1817–1862)
“In the fevered state of our country, no good can ever result from any attempt to set one of these fiery zealots to rights, either in fact or principle. They are determined as to the facts they will believe, and the opinions on which they will act. Get by them, therefore, as you would by an angry bull; it is not for a man of sense to dispute the road with such an animal.”
—Thomas Jefferson (1743–1826)