Roberts v. Commissioner

1986 T.C. Memo. 11, 51 T.C.M. 257, 1986 Tax Ct. Memo LEXIS 599
United States Tax Court·Decided January 9, 1986·No. Docket No. 20363-82.·Unpublished

Opinion

WILLIAM M. ROBERTS AND GERRI L. ROBERTS, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Roberts v. Commissioner
Docket No. 20363-82.
United States Tax Court
T.C. Memo 1986-11; 1986 Tax Ct. Memo LEXIS 599; 51 T.C.M. (CCH) 257; T.C.M. (RIA) 86011;
January 9, 1986.
William M. Roberts, *600 pro se.
Walter T. Thompson, for the respondent.

SHIELDS

MEMORANDUM FINDINGS OF FACT AND OPINION

SHIELDS, Judge: Respondent determined a deficiency in petitioners' Federal income tax of $3,588.00 for the taxable year 1979. The issues are: (1) whether petitioner, William M. Roberts, realized a loss upon the transfer of his interest in certain properties pursuant to a divorce decree; (2) whether petitioners are entitled to a deduction and, if so, the amount thereof for depreciation on rental properties; and (3) whether petitioners are entitled to miscellaneous deductions and, if so, the amount thereof for certain expenses paid in connection with rental properties.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. The stipulations of fact and attached exhibits are incorporated herein by reference.

Petitioners, William M. Roberts and Gerri L. Roberts, husband and wife, resided in Wilcox, Arizona, at the time of the filing of their petition. They filed a joint income tax return for the taxable year 1979 with the Internal Revenue Service at Ogden, Utah.

Prior to his marriage to Gerri L. Roberts, William M. Roberts ("William") was*601 married to Lana L. Roberts ("Lana"). He and Lana were divorced in September 1979 by a decree entered by the Superior Court of Maricopa County, Arizona. The divorce decree incorporated a property settlement agreement ("Agreement") which provided for an "equitable division and partition of [their] community 1 and joint property" described generally in the agreement as the Haskell Apartments, the Biddle Street Apartments, the Desert Breeze Motel, and the Diehl Properties (containing a laundromat and two apartments). Pursuant to the Agreement, the Haskell Apartments and the Biddle Street Apartments were deeded to William as his separate property and the Desert Breeze Motel and the Diehl Properties were deeded to Lana as her separate property. Each of them covenanted to be separately responsible for all liens, encumbrances, assessments and taxes on his or her separate property. William and Lana also agreed that they each owned one-half of the laundromat business located in the Diehl Properties. William, however, transferred all his right, title and interest in the business to Lana in lieu of any claim she might have against him for child support for their two minor daughters and*602 Lana assumed and agreed to pay a $10,000 debt which they jointly owed to his parents. She also agreed to secure this debt with a second mortgage on the Diehl Properties.

The Desert Breeze Motel had been purchased by William and Lana in 1975 for $115,000, of which $25,000 was paid in cash with the balance being represented by two mortgages totaling $90,000. William testified that the Haskell Apartments and the Biddle Street Apartments were purchased by them in 1975 for approximately $22,000 and $12,000, respectively, and that at the date of purchase the Haskell Apartments was subject to a mortgage of approximately $25,000 and the Biddle Street Apartments was subject to a mortgage of about $5,000 or $6,000. The record contains no evidence as to the cost or the encumbrances, if any, on the Diehl Properties, other than the $10,000 owed to William's parents. Furthermore, no evidence was presented as to*603 the amounts outstanding on any of the mortgages at the time of the divorce or as to the value of the laundromat business or the cost of supporting the two minor daughters until they reacher their majority.

On their 1979 income tax return, petitioners claimed a loss in the amount of $14,047 from William's exchange of his interest in the Desert Breeze Motel and the Diehl Properties for Lana's interest in the Haskell Apartments and the Biddle Street Apartments. Petitioners also claimed a depreciation deduction from rental income in the amount of $2,935 computed as follows:

Net Amount
DateCost orSalvage orEligible For
DescriptionAcquiredother BasisLand ValueDepreciation
Biddle Street
Apartments1975 $13,070$4,520$8,550
Haskell Apartments1975 9,8709708,900
New Apartment at
Haskell Apartments10-1-7826,0002,600

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Roberts v. Commissioner, 1986 T.C. Memo. 11, 51 T.C.M. 257, 1986 Tax Ct. Memo LEXIS 599 (tax 1986).

1986 T.C. Memo. 11 (Roberts v. Commissioner) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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