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:
“Obviously the facts are never just coming at you but are incorporated by an imagination that is formed by your previous experience. Memories of the past are not memories of facts but memories of your imaginings of the facts.”
—Philip Roth (b. 1933)
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—Ralph Waldo Emerson (1803–1882)
““It is of the highest importance in the art of detection to be able to recognise out of a number of facts which are incidental and which are vital.... I would call your attention to the curious incident of the dog in the night-time.”
“The dog did nothing in the night-time.”
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—Sir Arthur Conan Doyle (1859–1930)