Carlson v. Commissioner
United States Tax Court
Ps, husband and wife, purchased a fishing vessel (vessel). They financed that purchase by borrowing money from a bank. As security for the loan, Ps granted the bank a mortgage interest in the vessel.
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Ps, husband and wife, purchased a fishing vessel (vessel). They financed that purchase by borrowing money from a bank. As security for the loan, Ps granted the bank a mortgage interest in the vessel. Ps became delinquent in making payments to the bank on the loan, and the bank foreclosed on the vessel, sold it as part of that foreclosure, used the proceeds from that sale to reduce the outstanding principal balance of the loan, and discharged the remaining balance of the loan. As a result, Ps realized capital gain of $ 28,621 and discharge of indebtedness (DOI) income of $ 42,142. Ps excluded…
1Opinion of the Court
OPINION
Chiechi, Judge:
Respondent determined a deficiency in, and an accuracy-related penalty under section 6662(a)1 on, petitioners’ Federal income tax (tax) for 1993 in the amounts of $14,449 and $2,890, respectively.
The issues remaining for decision are:(1) Are petitioners entitled to exclude from gross income under section 108(a)(1)(B) discharge of indebtedness (DOI) income in the amount of $42,142? We hold that they are not.(2) Are petitioners liable for the accuracy-related penalty under section 6662(a)? We hold that they are to the extent stated herein.
Background
This case was submitted…
2Cases cited22 opinions
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- Borchers v. CommissionerUnited States Tax Court · 1990
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