Hilloak Realty Co. v. Chumley

OPINION

CHARLES D. SUSANO, JR., J.,

delivered the opinion of the court,

in which HERSCHEL P. FRANKS. P.J., and SHARON G. LEE, J., joined.

Hilloak Realty Company, a Tennessee limited partnership, was organized in 1984. Promptly following its organization, the company purchased an apartment complex in Oak Ridge. The purchase was financed by a loan secured by a mortgage on the property. Over the years, Hilloak took deductions on its yearly federal income tax return representing depreciation of the improvements on the property. These deductions resulted in a corresponding reduction in Hilloak’s basis…