§1011 — Adjusted basis for determining gain or loss

Because we decide this case on the basis of the preponderance .of the evidence, we need not decide upon which party the burden rest s Section 61(a)(3) provides that gross income .

However, given the statutory framework for determining adjusted basis, the interplay of DEFRA section 177(d)(2)(A) and section 1011 of the Code, and the reference in section 167(g) to the basis for determining gain as the basis to be used for amortization, we cannot agree that we are inferring petitioner’s basis for amortization by reason of congressional silence.

The adjusted basis discussed in section 1011 provides the basis on which depreciation is computed.

Section 1011 provides that a taxpayer's adjusted basis for determiningthe gain or loss from the sale or other disposition ofproperty shall be its cost, adjusted to the extent provided in section 1016.

Section 1011 provides that a taxpayer's adjusted basis for determining the gain or loss from the sale or other disposition ofproperty shall be its cost, adjusted to the extent provided in section 1016.

Section 1011 provides that a taxpayer’s adjusted basis for determining the gain or loss from the sale or other disposition of property shall be its cost, adjusted to the extent provided by section 1016.

167(g).32 Pursuant to section 1011(a), the adjusted basis for determining the gain or loss from the sale or other disposition of property is the cost of the property determined under section 1012 (with certain exceptions not material here) adjusted as provided in section 1016.

1011 provides that the adjusted basis for determining gain or loss from the sale or other disposition of property is the cost of such property, see sec.

In general, the basis on which a depreciation deduction is allowable with respect to any property under section 167(a) is the adjusted basis of the property, determined under section 1011 for the purpose of determining gain on the sale or other disposi- tion of such property.

in, be equal to the higher of the adjusted basis of such asset or the fair market value of such asset as of such date.” Section 167(g), which forms the basis for amortization deductions, provides that “The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be the adjusted basis provided in section 1011, for the purpose of determining the gain on the sale or other disposition of such property”.

t gross income includes gains derived from dealings in property. Section 1001(a) provides that the gain from the sale or other disposition of property shall be the excess of the amount realized over the adjusted basis, as calculated by reference to section 1011. The stocks at issue were owned by TAC, a qualified sub-chapter S subsidiary. Normally, an S corporation is not subject to Federal income taxes. Sec. 1363(a). Like a partnership, it is a conduit through which income and loss flow to its s

In this opinion, we decide whether, for purposes of computing a deduction for amortization, the adjusted basis of any amortizable intangible assets that petitioner held on January 1, 1985, is the regular adjusted cost basis provided in section 1011 or the higher of the regular adjusted cost basis or fair market value of such assets on January 1, 1985, as provided in the Deficit Reduction Act of 1984 (defra), Pub.

Tate, Treasury Regulation § 1.263A-1(e)(2)(i) defines “direct costs” as the sum of “direct material costs” and “direct labor costs.” Treasury Regulation § 1.263A-1(e)(3)(i) provides that “[i]ndirect costs are defined as all costs 12 Our recourse to section 1011 and its compatriots is supported not only by the fact that those sections function (by their terms) as rules of general application for Subtitle A (Income Taxes) of the Code but also by the reference to section 1016 in section 42(d)(4)(D

Section 1011 directs us that the basis to be used to determine gain or loss from a sale or other disposition of - 26 - [*26] property should be determined under section 1012. Section 1012 equates basis with the cost ofthe property. A liability that an asset's buyer assumes is included in the total cost ofacquiring property. Wash. Mut. Inc. v. Unit

Section 1011 directs us that the basis to be used to determine gain or loss from a sale or other disposition of - 26 - [*26] property should be determined under section 1012. Section 1012 equates basis with the cost ofthe property. A liability that an asset's buyer assumes is included in the total cost ofacquiring property. Wash. Mut. Inc. v. Unit

Section 1011 provides that a taxpayer's adjusted basis for determining the gain or loss from the sale or other disposition ofproperty shall be its cost, adjusted to the extent provided in section 1016. See also sec. 1012. A property's cost is "the amount paid for such property in cash or other property." Sec. 1.1012-1(a), Income Tax Regs. The term

Section 1011 provides that a taxpayer’s adjusted basis for determining the gain or loss from the sale or other disposition of property shall be its cost, adjusted to the extent provided by section 1016. See also sec. 1012. Under section 1016(a)(1), the basis of property must be adjusted for expenditures, receipts, losses, or other items, properly c

ount of losses and deductions taken into account by a shareholder under subsection (a) for any taxable year shall not exceed the sum of-- (A) the adjusted basis of the shareholder’s stock in the S corporation * * *, and (B) the shareholder’s adjusted basis of any indebtedness of the S corporation to the shareholder * * * - 10 - In pertinent part, section 1011 provides that the adjusted basis of property shall be the basis of such property determined under section 1012.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or ot er disposition of property is the basis determined under sectio t 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

- 542 - Section 1011 provides that the adjusted basis for determining the gain or loss from the sale or other disposition of property is the basis determined under section 1012, adjusted as provided in section 1016.

The basis on which amortization is to be allowed is defined as the adjusted basis provided in section 1011 for determining the gain on the sale or other disposition of the property.

operties as of December 31, 1987, the close of the year in which the Atrium was completed”, is “equitable” and would result in a “proper adjustment” under section 1016(a)(1). Petitioner proposes the following allocation: 2 As pertinent to this case, sec. 1011 provides that the adjusted basis for determining gain or loss from the sale or other disposition of property is the cost of such property, see sec. 1012, adjusted as provided in sec. 1016. Sec. 1016(a)(1), in part, provides that proper adju

operties as of December 31, 1987, the close of the year in which the Atrium was completed”, is “equitable” and would result in a “proper adjustment” under section 1016(a)(1). Petitioner proposes the following allocation: 2 As pertinent to this case, sec. 1011 provides that the adjusted basis for determining gain or loss from the sale or other disposition of property is the cost of such property, see sec. 1012, adjusted as provided in sec. 1016. Sec. 1016(a)(1), in part, provides that proper adju

The basis on which amortization is to be allowed is defined as the adjusted basis provided in section 1011 for determining the gain on the sale or other disposition of the property.

AFLIC assigned to AFIC in July 1989.8 Section 166(a) provides a deduction for any debt which becomes worthless during the taxable year. The amount of the deduction for a bad debt is limited to the taxpayer’s adjusted basis in the debt as provided in section 1011. Sec. 166(b); Perry v. Commissioner, 92 T.C. 470, 477-478 (1989), affd. without published opinion 912 F.2d 1466 (5th Cir. 1990). Whether, and when, a debt becomes worthless is determined by looking at all the facts and circumstances incl

Section 1011(a) provides that the adjusted basis for determining the gain or loss from the sale or disposition of property is the basis as adjusted under section 1012 or other applicable sections of the Code.

Section 1001 dictates the method for calculating such gain: 20 The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess of the adjusted basis provided in such section for determining loss over the amount realized.

9 This number is from the notice of deficiency and the Patacsils’ Form 4797 calculation for 2017. However, as we will discuss later, the amount reported and the adjustment should respectively be ($19,419) and $19,419 based on Young’s testimony at trial. See infra note 11. 12 [*12] When there’s debt, the general rule is that “the amount rea

See id.; see also Nwabasili v.

The basis for determining the amount of the deduction for any loss pursuant to section 165(a) is the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of the property.

using the applicable depreciation method, the applicable recovery period, and the applicable convention. The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property is the adjusted basis as provided in section 1011. § 167(c). A taxpayer may elect to deduct as a current expense the cost of section 179 property acquired and used in the active conduct of a trade or business and placed in service during the year. § 179(a), (b), (d)(1); Treas. Reg. § 1.

sustained during the taxable year and not compensated for by insurance or otherwise." In the case ofa loss by theft, a taxpayer may deduct the lesser of: (1) the fair market value ofthe stolen property; or (2) the adjusted basis as determined under section 1011. Sec. 165(b); secs. 1.165-7(b)(1), 1.165-8(c), Income Tax Regs. A theft loss is "sustained during the taxable year in which the taxpayer discovers such loss." Sec. 165(e). Ifthere exists a claim for reimbursement in the year ofdiscovery,

Amount ofDeduction Section 166(b) provides that the "amount ofthe deduction for any bad debt shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition ofproperty." Section 1011 cross-refers to section 1012, which provides that the basis ofproperty is generally its cost.

the separation ofpowers doctrine. Contrary to Appeals' role within Treasury and the IRS, Congress explicitly established the CFPB to serve as an independent agency, see Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, sec. 1011, 124 Stat. at 1964 (2010),8 and as an independent agency, the CFPB was subject to the separation of powers doctrine. Congress created the CFPB with a single director protected against removal by the President without cause (i.e., only for "i

ank. Petitioner's bank statement, coupled with his testimony and two letters from Mr. Reyes, is enough to establish an investment. Section 165(a) allows for a loss deduction with the amount ofthe loss determined under the adjusted basis provisions ofsection 1011. Sec. 165(b). Generally, the basis ofproperty under section 1011 is the amount paid. See sec. 1.1012-1(a), Income Tax Regs. Petitioner alleges a total investment of$500,000. However, he produced evidence to substantiate a $300,000 invest

Section 1001(a) provides that the gain from the sale ofproperty is the excess ofthe amount realized therefrom over the adjusted basis ofthe property provided in section 1011.

A theft loss is limited to the lesser of: (1) the difference between the fair market value ofthe propertybefore and after the loss or (2) the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition ofthe property.

Computation ofGain or Loss.--The gain from the sale or other disposition ofproperty shall be the excess ofthe amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess ofthe adjusted basis provided in such section for determining loss over the amount realized.

The basis for determining the deduction is the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition ofproperty.

Capital Gain Section 1001(a) provides that "[t]he gain from the sale or other disposition ofproperty shall be the excess ofthe amount realized therefrom over the adjusted basis provided in section 1011 for determining gain".

Basis in the Note Section 453B provides that ifan installment obligation is sold or exchanged, gain or loss shall result to the extent ofthe difference between the basis ofthe obligation and the amount realized in the sale.

e S corporation to the shareholder at the end ofthe year ofloss. See sec. 1.1366-2(a), Income Tax Regs. Like the adjusted basis ofany property,.the adjusted bases ofstock and debt ofan S corporation are determined under general rules set forth under section 1011. See sec. 1.1367-1(a)(2), Income Tax Regs. (besides adjustments to basis required by section 1367, other adjustments to basis ofstock are determined under other applicable provisions ofthe Internal Revenue Code).3 The adjusted basis of 3

(a) Computation ofGain or Loss --The gain from the sale or other disposition ofproperty shall be the excess ofthe amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess ofthe adjusted basis provided in such section for determining loss over the amount realized.

Under section 1012, basis is generally the property's cost. In the case ofstock in an S corporation, - 10 - [*10] adjustments to basis include adjustments required under section 1367.1° Sec. 1016(a)(17). On briefthe parties focus on Mr. Moore's basis in his ATS stock without regard to adjustments required under section 1367, which they

(a) Computation ofGain or Loss --The gain from the sale or other disposition ofproperty shall be the excess ofthe amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess ofthe adjusted basis provided in such section for determining loss over the amount realized.

(a) Computation ofGain or Loss --The gain from the sale or other disposition ofproperty shall be the excess ofthe amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess ofthe adjusted basis provided in such section for determining loss over the amount realized.

(a) Computation ofGain or Loss --The gain from the sale or other disposition ofproperty shall be the excess ofthe amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess ofthe adjusted basis provided in such section for determining loss over the amount realized.

(a) Computation ofGain or Loss --The gain from the sale or other disposition ofproperty shall be the excess ofthe amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess ofthe adjusted basis provided in such section for determining loss over the amount realized.

The Commissioner argues that the Esrigs had more gain on the sale oftheir properties in 2001 and 2002 than what they reported because they overstated their bases in both the R Street and Marymount Drive properties. The Esrigs presented no evidence on this issue, so we find for the Commissioner once agam. -17- II. Additions to Tax and Pe

clude in income "the vested accrued benefit "(otherthan employee contributions)." That parenthetical was changed to "(other than the employee's investment in the contract)" in the Technical and Miscellaneous Revenue Act of 1988, Pub. L. No. 100-647, sec. 1011(h)(4), 102 Stat. at 3465, before Congress eventually divided sec. 402(b) into four paragraphs, shifting para. (2) to para. (4) in the Unemployment Compensation Amendments of 1992, Pub. L. No. 102-318, sec. 521(a), 106 Stat. at 300. Petition

68, and 169. Otherwise a taxpayer recovers the cost of capital expenditures through increased basis when disposing of the property. See -sec. 1001 (defining gain on the sale of property as the excess of the amount realized over the adjusted basis); sec. 1011 (giving general rule that the adjusted basis is basis under section 1012 as adjusted by section 1016); sec. 1012 (defining basis as the cost of property); sec. 1016(a) (1) (increasing basis by expenditures properly chargeable to capital). Th

The depreciation deduction is based on the adjusted basis of the property, as determined under section 1011 for the purpose of determining gain on the sale or other disposition of the property.

oduction of income and that the owner may deduct expenses related to the activity. See secs. 212, 167. The basis upon which exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property is the adjusted basis as provided in section 1011. Sec. 167(c). Under section 1011, the adjusted basis tof property is determined by the applicable sections of subchapter 0, which include section 1015. The basis of property acquired by gift is the basis of that property in the hands of

including . obsolescence) of property used in a trade or business . Sec : 167(a) . The basis on which exhaustion, wear and tear, and ii I - 8 - (cid:127) obsolescence are to be allowed in respect of any property is the adjusted basis as provided in section 1011 . Sec . 167(c) : The record does not establish what office furniture and/or equipment was depreciated, . what amount was paid for it, when .it , Was-put in service, or who owned it . Accordingly, petitioner ha s not substantiated the dedu

Amount of Loss' The amount of a particular casualty loss deduction is limited to the lesser of (1) the difference between the fair market value of the property before and after the loss, or (2) the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of the property .

Amount of Loss' The amount of a particular casualty loss deduction is limited to the lesser of (1) the difference between the fair market value of the property before and after the loss, or (2) the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of the property .

"as a depreciation deduction a reasonable allowance for the exhaustion, wear and tear (including a reasonable allowance for obsolescence)--(1) of property used in the trade or business, or (2) of property held for the production of income ." Depreciation deductions are calculated with respect to the adjusted basis of the property determined under section 1011, the applicable depreciation method, the applicable recovery period, and the applicable convention .

In general, the basis on which depreciation is allowable under section 167 (a) with respect to any property is the adjusted basis of the property, determined under section 1011 for the purpose of determining gain on the sale or other disposition of such prop- erty .

basis of the property, if the deductions are larger than they would be under the cost depletion method. Section 612 governs cost depletion, an alternate method of calculating depletion deductions using the adjusted basis of the property provided in section 1011. See also sec. 1.611-2(b)(2), Income Tax Regs. When the AMT applies, section 56(g)(4)(C)(i) offsets the permanent benefit of the percentage depletion method by requiring an ACE adjustment if a taxpayer’s depletion deduction exceeds the ad

section 1011 for the purpose of determining gain on the sale or other disposition of the property . See sec . 167(c) . Mr . Goode testified that the claimed depreciation expense deduction of $4,139 was calculated with reference to the previous year's return, which showed the same or a very similar amount . We do not have the benefit of the previous

section 1011 for the purpose of determining gain on the sale or other disposition of the property . See sec . 167(c) . Mr . Goode testified that the claimed depreciation expense deduction of $4,139 was calculated with reference to the previous year's return, which showed the same or a very similar amount . We do not have the benefit of the previous

The basis on which a depreciation deduction is allowable with respect to any property under section 167(a) is the adjusted basis of the property, determined under section 1011 for the purpose of determining gain on the sale or other disposition f the property .

vides a theft loss deduction in the taxable year in which the taxpayer discovers the loss. The basis for determining the amount of the deduction for any loss is the lesser of the fair market value or the adjusted basis of the property prescribed by section 1011. Secs. 1.165-7(b)(1), 1.165- - 7 - 8(c), Income Tax Regs. The amount of the loss deduction is limited to the extent the loss exceeds $100 and the net casualty loss exceeds 10 percent of the taxpayer’s adjusted gross income. See sec. 165(h

The amount of a loss that a taxpayer is entitled to deduct under section 165 is the lesser of -16- (1) the difference between the fair market value of the property before the loss and the fair market value of the property after the loss, the latter value in the case of loss by theft being zero, or (2) the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of the property which was the subject of the loss.

omputer simulator in Form 4562 represented petitioners’ best estimate of the replacement cost of that simulator. - 17 - exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be the adjusted basis provided in section 1011". As pertinent here, section 1011(a) defines the term "adjusted basis" as the basis determined under section 1012, adjusted as provided under section 1016, and section 1012 pro- vides that the basis of property is its cost. Section 1016(a

The basis for determining the amount of the deduction is the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

equal to the higher of the adjusted - 7 - basis of such asset or the fair market value of such asset as of such date.” Section 167(g), which forms the basis for amortization deductions, provides that “The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be the adjusted basis provided in section 1011, for the purpose of determining the gain on the sale or other disposition of such property”.

Section 166(a) allows a deduction for bad debts.5 The basis for determining the amount of the deduction for any bad debt is the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

Section 166(a) allows a deduction for bad debts.5 The basis for determining the amount of the deduction for any bad debt is the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

(b) Amount of Deduction.-–For purposes of subsection (a), the basis for determining the amount of the deduction for any bad debt shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

liabilities by reason of the assumption by such partner of partnership liabilities”. Sec. 752(a). 6 Sec. 742 provides: “The basis of an interest in a partnership acquired other than by contribution shall be determined under part II of subchapter O (sec. 1011 and following).” In general, the basis of property acquired by gift is the same as it was in the hands of the donor. Sec. 1015. For purposes of determining loss, however, if that basis is greater than the fair market value of the property at

The basis for determining the amount of the deduction for any bad debt is the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

Section 168(b)(3)(B) provides that the straight line method of depreciation is applicable to residential rental property and section 168(c) provides for the applicable recovery period of 27.5 years for such property.

c. 1.611- 1(a), Income Tax Regs. The depletable basis applicable to timber is contained in section 1.611-3(a), Income Tax Regs. which - 13 - describes the cost basis provided by section 612, which, in turn, describes an "adjusted basis" provided by section 1011. The adjusted cost basis under section 1011 for determining gain or loss from the sale of property is the cost basis or other basis determined under section 1012 adjusted as provided by section 1016. Annual depletion deductions are allowe

Furthermore, section 1001(a) provides that gain from a sale or other disposition of property is the excess of the amount realized therefrom over the adjusted basis provided in section 1011 for determining gain.

With respect to determinations of gain or loss, section 1001(a) provides that the gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess of the adjusted basis provided in such section for determining loss over the amount re

Under both provisions, the amount of the deduction is determined by reference to the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of the property.

In this connection, in addition to other evidence in the record, the 1991 and 1992 joint returns filed by petitioner (continued...) - 135 - The gain from the sale or other disposition of property is the excess of the amount realized over the adjusted basis of the property provided in section 1011 for determining gain, and the loss is the excess of the adjusted basis provided in that section for determining loss over the amount realized.

The basis on which a depreciation deduction is allowable with respect to any property under section 167(a) is the adjusted basis of the property, determined under section 1011 for the purpose of determining gain on the sale or other disposi- tion of such property.

Furthermore, section 1001(a) provides that gain from a sale or other disposition of property is the excess of the amount realized therefrom over the adjusted basis provided in section 1011 for determining gain.

Basis for Depreciation.-- (1) In general.--The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be the adjusted basis provided in section 1011, for the purpose of determining the gain on the sale or other disposition of such property.

10In the case of a taxpayer other than a corporation, where a nonbusiness debt becomes worthless during the taxable year, the (continued...) - 9 - the amount of the deduction under section 166(a) for any business bad debt is the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

ner’s claimed “harness-racing” losses for 1990 are sustained. F. Capital Gain Gains on the sale of property are taxable under section 61, and the gain is computed by reference to the excess of the amount realized over the adjusted basis provided in section 1011. See sec. 1001. We must determine whether petitioner reported the - 26 - correct amount of capital gain on the sale of Sipsey Harbor lots and the sale of trucks. Sipsey Harbor Petitioner contends that he sold Sipsey Harbor in one transact

ner’s claimed “harness-racing” losses for 1990 are sustained. F. Capital Gain Gains on the sale of property are taxable under section 61, and the gain is computed by reference to the excess of the amount realized over the adjusted basis provided in section 1011. See sec. 1001. We must determine whether petitioner reported the - 26 - correct amount of capital gain on the sale of Sipsey Harbor lots and the sale of trucks. Sipsey Harbor Petitioner contends that he sold Sipsey Harbor in one transact

167(g) in 1979 and 1982), specifies the basis for depreciation of any property "shall be the adjusted basis provided in section 1011, for the purpose of determining the gain on the sale or other disposition of such property." Sec.

ner expended on the emus. Under section 167(c), the basis for the deduction for - 11 - exhaustion, wear and tear, and obsolescence in respect of property is the adjusted basis for determining gain or loss on the sale of such property as provided in section 1011. Section 1011(a) provides generally that the adjusted basis for determining gain or loss shall be, as pertinent here, the basis determined under section 1012. Section 1012 provides generally that the basis of property is its cost. On this

167(g) in 1979 and 1982), specifies the basis for depreciation of any property "shall be the adjusted basis provided in section 1011, for the purpose of determining the gain on the sale or other disposition of such property." Sec.

in any transaction entered into for profit; and (3) losses arising from fire, storm, shipwreck, other casualty, or from theft. See sec. 165(c). The amount of the deduction for any loss cannot exceed the adjusted basis of the property, as provided in section 1011. See sec. 165(b). To be entitled to a deduction under section 165(a), a taxpayer is required to substantiate the deduction through the maintenance of books and records or other sufficient evidence. See sec. 1.6001-1, Income Tax Regs. Pet

The deduction for a loss is limited to the individual's basis in the underlying asset, as determined under section 1011, see sec.

Section 1011 specifies the taxpayer’s adjusted basis in property. Section 453B deals specifically with gain or loss on the sale or other disposition of an installment obligation. The parties are in agreement that petitioner’s adjusted bases in the 1987 Ampel notes and the Holland Spring notes were $6,940,865 and $2,724,451, respectively. Their disa

- 8 - (b) Amount of Deduction.--For purposes of subsection (a), the basis for determining the amount of the deduction for any loss shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

* * * * * * * (b) Amount of Deduction.--For purposes of subsection (a), the basis for determining the amount of the deduction for any loss shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

The amount of the deduction is limited to the amount of the basis of the property prescribed by section 1011 for determining the loss from the sale or other disposition of the property.

The basis to be used is "the adjusted basis provided in section 1011 for the purpose of determining the gain on the sale or other disposition of such property." Sec.

the case of individuals, this deduction is limited to losses incurred in a trade or business, losses incurred in a for-profit transaction, and casualty or theft losses. Sec. 165(a), (c). The adjusted basis for the loss deduction is determined under section 1011. A loss must be evidenced by closed and completed transactions, fixed by identifiable events, and actually sustained during the taxable year. Sec. 1.165-1(b), Income Tax Regs. The amount of loss allowable under section 165 shall not exce

mounts should be treated as bad debts. Section 166(a) provides a deduction for any debt that becomes worthless during the taxable year. The amount of the deduction for a bad debt is limited to the taxpayer's adjusted basis in the debt as provided in section 1011. Sec. 166(b); Perry v. Commissioner, 92 T.C. 470, 477-478 (1989), affd. without published opinion 912 F.2d 1466 (5th Cir. 1990). Whether, and when, a debt becomes worthless is determined by inspecting the facts and circumstances. Sec. 1.

The amount of the deduction is the taxpayer's adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

Section 166(b) provides that the basis for determining the amount of the deduction for any bad debt shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

The adjusted basis of property is its basis (cost) as determined under section 1011 and as adjusted by section 1016.

uding the value of collateral, if any, securing the debt and the financial condition of the debtor. Sec. 1.166-2(a), Income Tax Regs. Section 166(b) provides that the amount of the deduction for - 26 - any bad debt is the adjusted basis provided in section 1011. As pertinent here, section 1011(a) defines the term "adjusted basis" as the basis determined under section 1012, adjusted as provided under section 1016, and section 1012 provides that the basis of property is its cost. Claimed Nonbusine

The adjusted basis of property is its basis (cost) as determined under section 1011 and as adjusted by section 1016.

ction 166. Section 166(a) provides there shall be allowed as a deduction any debt that becomes worthless during the taxable -53- year. The amount of the deduction for a bad debt is limited to the taxpayer's adjusted basis in the debt as provided by section 1011. Sec. 166(b); Perry v. Commissioner, 92 T.C. 470, 477-478 (1989), affd. without published opinion 912 F.2d 1466 (5th Cir. 1990). Section 166(d)(1)(B) provides that where any nonbusiness bad debt becomes worthless within the taxable year,

tribution (in the form of a transfer refund from the Maryland State Teachers' Retirement System) in 1990. However, the taxpayer remained so employed at least through the time that the (...continued) 2085, 2481-2483. It was subsequently renumbered by sec. 1011A(g)(1)(A) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat. 3342, 3479. Because the applicable regulation does not reflect the statutory renumbering, the regulation appears as sec. 54.4981A-1T, Temporary Qua

(b) Amount of Deduction.--For purposes of subsec- tion (a), the basis for determining the amount of the deduction for any loss shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.

The allowable amount of the loss is the adjusted basis of the security provided in section 1011 for purposes of determining the loss from the sale or other disposition of property.

For purposes of section 166, the basis for determining the amount of the deduction for any bad debt is the adjusted basis of the debt as prescribed by section 1011 for purposes of determining the loss from the sale or other disposition of property.

Section 1001(a) provides in part that the gain from the sale or other disposition of property shall be the excess of the amount realized over the adjusted basis provided in section 1011 for determining gain.

ers also failed to prove that they satisfy the requirements imposed by sec. 274(d)(4). - 56 - in a trade or business. Section 167(c)(1) provides that the basis on which the exhaustion, wear and tear is allowed is the adjusted basis determined under section 1011. Thus, to be entitled to a depreciation deduction, petitioners must establish their adjusted bases in the properties with respect to which they are claiming depreciation deductions for the years at issue. Prior to the trial herein, the pa

The allowable amount of the loss is the adjusted basis of the security provided in section 1011 for purposes of determining the loss from the sale or other disposition of property.

enture was.1 Although section 165(a) provides that there shall be allowed as a deduction any loss sustained during the taxable year (and not compensated by insurance or otherwise), the basis for determining such loss must be the adjusted basis under section 1011. The amount of loss allowable shall not exceed the taxpayer's adjusted basis in the asset, sec. 1.165-1(c), Income Tax Regs. Petitioners have the burden of proving the amount of their basis, Millsap v. Commissioner, 46 T.C. 751, 760 (196

Thus, the amended petition alleges in part as follows: During the years of 1990, 1991, and 1992 the Petitioner did in fact receive payment for services actually rendered in a fair market value exchange under 26 USC §83, §1001, §1011 and §1012 not comprising taxable income, said acts performed as Unalienable rights to life, liberty, pursue happiness and acquire property, with labor being property.

Thus, the amended petition alleges in part as follows: During the years of 1990, 1991, and 1992 the Petitioner did in fact receive payment for services actually rendered in a fair market value exchange under 26 USC §83, §1001, §1011 and §1012 not comprising taxable income, said acts performed as Unalienable rights to life, liberty, pursue happiness and acquire property, with labor being property.

by our conclusion that equitable ownership of the property was transferred in 1985. Section 1001 states that the gain from a sale or other disposition of property is the excess of the amount realized over the taxpayer's adjusted basis as provided in section 1011. Section 1001(b) defines the amount realized as the sum of any money received plus property received. Liabilities assumed or paid by a purchaser are included in the amount realized by the seller on the sale. Crane v. Commissioner, 331 U.

The basis to be used is "the adjusted basis provided in section 1011 for the purpose of determining gain on the sale or other disposition of such property." Sec.

We also note that section 410, like section 7476, was also added to the Internal Revenue Code by ERISA, specifically section 1011 of ERISA.