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:
“The poor and the low have their way of expressing the last facts of philosophy as well as you. “Blessed be nothing,” and “The worse things are, the better they are,” are proverbs which express the transcendentalism of common life.”
—Ralph Waldo Emerson (1803–1882)
“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)
“Neither moral relations nor the moral law can swing in vacuo. Their only habitat can be a mind which feels them; and no world composed of merely physical facts can possibly be a world to which ethical propositions apply.”
—William James (1842–1910)