Court Opinion

ID: 4624381
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:55:01.783389+00
Date Added: 2024-06-11T07:56:31.143488
License: Public Domain

RICHARD POWERS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Powers v. CommissionerDocket No. 20896.United States Board of Tax Appeals14 B.T.A. 701; 1928 BTA LEXIS 2931; December 13, 1928, Promulgated *2931  Respondent affirmed for lack of proof of error.  W. L. Schuyler, C.P.A., for the petitioner.  T. M. Mather, Esq., for the respondent.  VAN FOSSAN *702  OPINION.  VAN FOSSAN: Petitioner asks redetermination of a deficiency in income tax for the calendar year 1924 amounting to $1,076.29.  The sole issue is the fair market value of a mortgage given on certain property located in Miami, Fla., during the taxable year, which respondent determined to have a fair market value equal to 40 per cent of its face and which petitioner contends had no fair market value at the time received.  The evidence shows that this property was sold in 1924 for a price of $53,000 of which $20,000 was paid in cash and the balance covered by a mortgage due one-half on July 21, 1926, and the remainder in 1927.  It appears that the property was purchased for speculative purposes and was not offered for sale in 1924 or 1925.  It is of record that the property increased in value in 1924 and 1925.  Petitioner's testimony is directed almost entirely to proving that in 1926, after the deflation of the Florida boom, it was impossible to sell the mortgage notes or refinance the*2932  mortgage for its face value or anything approximating the same.  The record is almost devoid of any evidence bearing on the year 1924 other than that market values at that time were increasing.  The testimony fails to prove that during the taxable year the mortgage was not fully worth the value determined.  Subsequent developments in 1926 and other years do not demonstrate that at the time the mortgage was received in 1924 its fair market value was less than 40 per cent of its face.  Petitioner has failed to sustain the burden of proving respondent's determination to be in error.  . Judgment will be entered for the respondent.