Court Opinion

ID: 4481447
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:54.019129+00
Date Added: 2024-06-11T15:03:45.217526
License: Public Domain

FoRrester, /., concurring: I think that the majority has reached the correct result and that that result is entirely supported by the ultimate finding “it is clear that [petitioners] were not seeking to realize on possible post-conversion appreciation in value.” (Emphasis supplied.) The time when the conversion occurred is obviously the key, and any appreciation prior thereto would not have grown while the property was being “held for investment,” (sec. 1.212-1 (b), Income Tax Kegs.) but while the property was being held as taxpayers’ personal residence. The foregoing raises the question, Appreciation over what basis? I believe that the only sensible answer is appreciation over the fair market value of the property at the time of conversion, for otherwise the owner of a residence which had declined in value during his occupancy would be precluded from any tax benefits in attempting to minimize his loss even though it were quite apparent that the property would appreciate in value after he had abandoned it as a residence unless he could also prove that he reasonably expected the appreciation to carry through his original tax base. By way of dictum the majority seems to require just such excessive (for want of a better term) postconversion appreciation and I think that this dictum is wrong. HreNNEN and Raum, //., agree with this concurring opinion.