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:
“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)
“These facts have always suggested to man the sublime creed that the world is not the product of manifold power, but of one will, of one mind; and that one mind is everywhere active, in each ray of the star, in each wavelet of the pool; and whatever opposes that will is everywhere balked and baffled, because things are made so, and not otherwise.”
—Ralph Waldo Emerson (1803–1882)
“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)