Court Opinion

ID: 820940
Source: CourtListenerOpinion
Date Created: 2013-02-20 20:35:00.519779+00
Date Added: 2024-06-11T15:21:21.222447
License: Public Domain

PURSUANT TO INTERNAL REVENUE CODE
 SECTION 7463(b),THIS OPINION MAY NOT
  BE TREATED AS PRECEDENT FOR ANY
            OTHER CASE.
                          T.C. Summary Opinion 2013-12

                         UNITED STATES TAX COURT

                  JASON MICHAEL FITE, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent

      Docket No. 10712-11S.                        Filed February 20, 2013.

      Jason Michael Fite, pro se.

      Emily Giometti, for respondent.

                              SUMMARY OPINION

      ARMEN, Special Trial Judge: This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect when the petition
                                           -2-

was filed.1 Pursuant to section 7463(b), the decision to be entered is not reviewable

by any other court, and this opinion shall not be treated as precedent for any other

case.

        This matter is before the Court on respondent’s Motion For Summary

Judgment, filed December 14, 2012, pursuant to Rule 121. In his motion

respondent moves for a summary adjudication in his favor on the substantive issue

presented by this case; namely, whether petitioner is entitled to a first-time

homebuyer credit (FTHBC) under section 36 for 2009. Respondent concedes in his

motion that petitioner is not liable, as originally determined, for an accuracy-related

penalty under section 6662(a) and (b)(2) for a substantial understatement of income

tax.

        For the reasons discussed below, we shall grant respondent’s motion.

                                       Background

        Petitioner resided in the State of Ohio at the time that the petition was filed

with the Court.

        As reflected in a U.S. Department of Housing and Urban Development

Settlement Statement (HUD-1), petitioner purchased a residence at 4083 Pleasant

        1
         Unless otherwise indicated, all subsequent section references are to the
Internal Revenue Code in effect for 2009, the taxable year in issue. All Rule
references are to the Tax Court Rules of Practice and Procedure.
                                         -3-

Street, Cincinnati, Ohio, on November 11, 2009. The Settlement Statement lists the

name and address of the seller as Michael F. Fite of 4083 Pleasant Street,

Cincinnati, Ohio. Michael F. Fite is petitioner’s father.

      According to the Settlement Statement, petitioner financed the contract sale

price of $105,800, plus related transaction costs, principally by a new loan of

$103,883 and a “gift of equity” of $3,703.

      On his 2009 income tax return, petitioner claimed an FTHBC of $8,000 in

respect of his purchase of the Pleasant Street residence.

      Ultimately, after examination, respondent disallowed the FTHBC,

determining a deficiency of $8,000, as well as an accuracy-related penalty (since

conceded) of $1,600. Petitioner then appealed to this Court for redetermination.

                                      Discussion

A. The FTHBC

      As applicable herein, and as amended by the American Recovery and

Reinvestment Act of 2009, Pub. L. No. 111-5, sec. 1006, 123 Stat. at 316, section

36 generally allows up to an $8,000 credit against an individual’s Federal income

tax if the individual qualifies as a first-time homebuyer who “purchased” a principal

residence in the United States after April 9, 2008, and before December 1, 2009.

Sec. 36(a), (h).
                                          -4-

      Section 36(c)(3)(A)(i) defines a “purchase” for purposes of the FTHBC as

“any acquisition, but only if * * * the property is not acquired from a person

related to the person acquiring such property”. A related person specifically

includes an ancestor, secs. 36(c)(5), 267(b)(1), (c)(4), which would, of course,

include a parent.

      Respondent contends that petitioner did not “purchase” the residence within

the meaning of section 36 because he acquired the residence from a “related

person”, i.e., his father.2 Thus, respondent concludes that petitioner is not entitled

to the FTHBC in respect of the Pleasant Street residence.

      Petitioner does not deny that he acquired the Pleasant Street residence from

his father. Rather, he contends that “[t]here shouldn’t be a rule that you bought

a home from a relative when you buy the house for fair market value & you have a

mortgage payment.”

      Although the Court recognizes the logic of petitioner’s position and is aware

of his current financial situation, petitioner must understand that

absent some constitutional defect, the Court is constrained to apply the law as

written, see Estate of Cowser v. Commissioner, 736 F.2d 1168, 1171-1174 (7th Cir.

      2
        Respondent does not dispute that petitioner otherwise qualifies as a “first-
time homebuyer” or that the residence is a “principal residence” for FTHBC
purposes.
                                            -5-

1984), aff’g 80 T.C. 783 (1983), and may not rewrite the law because we might

deem its effects susceptible of improvement, see Commissioner v. Lundy, 516 U.S.
235, 252 (1996) (citing Badaracco v. Commissioner, 464 U.S. 386, 398 (1984)).

Accordingly, petitioner’s argument must, in this instance, be addressed to his

elected representatives. “The proper place for a consideration of petitioner’s

complaint is the halls of Congress, not here.” Hays Corp. v. Commissioner, 40 T.C.
436, 443 (1963), aff’d, 331 F.2d 422 (7th Cir. 1964).

B. Conclusion

          Petitioner acquired the Pleasant Street residence from his father, a related

person under section 36(c)(5). Thus, because petitioner acquired the residence from

a related person, he did not “purchase” it within the meaning of section 36(c)(3),

and he is therefore not entitled to the FTHBC under section 36. Accordingly, the

Court is constrained to sustain respondent’s determination disallowing the $8,000

credit.
                             -6-

To reflect the foregoing,

                                   An appropriate order and decision

                            will be entered granting respondent’s

                            motion for summary judgment and deciding

                            that petitioner is liable for the deficiency in

                            tax but not the accuracy-related penalty.