Total Deferred gain from sale of Virginia house Sale price Cost Closing costs Deferred gain Adjusted basis Gain on sale
Sale price Closing costs
Amount realized Purchase price Closing costs Improvements
Cost basis Depreciation allowed
87,900 1,214 153,435
Respondent increased pe
titioner’s cost basis in the New
Jersey house by $153,435 for
improvements petitioner made to the
in the improvements to the New Jersey
house $20,000 petitioner est
ablished he incurred in 1984 for
modifications to the kitchen
$22,500 for modifications to
the kitchen of the New Jersey house.
ions are presumed to be correct and
petitioner bears the burden
of proof on all issues in these
Welch v. Helvering, 290 U.S. 111,
9Sec. 7491, which is effective for court proceedings arising in connection with examinations commencing after July 22, 1998,
shifts the burden of proof to the Commissioner in certain circumstances and places on the Commissioner the burden of production with respect to penalties and additions to tax.
7491 is inapplicable in these cases because the examination of petitioner and Mrs. Wood’s returns commenced in December 1997.