Freeland v. Commissioner
United States Tax Court
Petitioner bought real estate in California for $ 50,000, paying the seller $ 9,000 cash and giving her a purchase-money mortgage in the amount of $ 41,000. Under California law, there is no personal liability on the mortgagor in a purchase-money mortgage. Petitioner took no deductions for depreciation while he held the property.
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Petitioner bought real estate in California for $ 50,000, paying the seller $ 9,000 cash and giving her a purchase-money mortgage in the amount of $ 41,000. Under California law, there is no personal liability on the mortgagor in a purchase-money mortgage. Petitioner took no deductions for depreciation while he held the property. Subsequently, when the fair market value of the property dropped to $ 27,000, and the unpaid balance on the mortgage note was still $ 41,000, petitioner voluntarily reconveyed the property to the mortgagee for no monetary consideration. Held, the reconveyance…
1Opinion of the Court
Drennen, Judge:
Respondent determined a deficiency in the Federal income tax of petitioners for the taxable year 1975 in the amount of $4,252. After concessions, the sole issue to be decided is whether petitioners realized an ordinary or capital loss upon the voluntary conveyance of real property, encumbered by a nonrecourse purchase-money mortgage, by petitioners to their mortgagee without any monetary consideration.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The stipulation of facts together with the exhibits attached thereto are incorporated herein by this…
2Cases cited35 opinions
- Helvering v. HallockSupreme Court of the United States · 1940
- Crane v. CommissionerSupreme Court of the United States · 1947
- Helvering v. HammelSupreme Court of the United States · 1941
- Gerhard v. StephensCalifornia Supreme Court · 1968
- Johnson v. CommissionerUnited States Tax Court · 1973
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3Cited by50 opinions
- Guest v. CommissionerUnited States Tax Court · 1981
- Ebben v. CommissionerCourt of Appeals for the Ninth Circuit · 1986
- Citron v. CommissionerUnited States Tax Court · 1991
- Middleton v. CommissionerUnited States Tax Court · 1981
- James W. Yarbro and Mary E. Yarbro v. Commissioner of Internal Revenue ServiceCourt of Appeals for the Fifth Circuit · 1984
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