- 2 -
Court with computations for entry of decision under Rule 155.1
Differing computations were proffered, and we consider here which
computation is correct. In our earlier opinion, we held that
petitioners, under section 1034, were entitled to roll over a
portion of the gain on the sale of their residence. We also
specifically held that petitioners were not entitled to roll over
$112,470 of improvements that were not commenced prior to the 2-
year replacement deadline. Respondent’s computation is based on
the premise that the $112,470 was included in petitioners’
original reporting of this transaction and that its elimination
would therefore increase any income and any resulting deficiency.
Petitioners, conversely, contend that respondent’s premise is
incorrect.
The difference in the parties’ computations arises from
petitioners’ contention that the record does not expressly show
that petitioners had included the $112,470 in their attempt to
defer gain under section 1034 in the questioned transaction.
Petitioners further contend that respondent, who bore the burden
of proof on that aspect of the case, did not introduce evidence
expressly showing that the improvements proven at trial were ever
included in the replacement cost petitioners reflected on their
return. Respondent asserts that petitioners’ argument is not a
1 Rule references are to the Tax Court Rules of Practice and
Procedure, and section references are to the Internal Revenue
Code in effect for the years in issue.
Page: Previous 1 2 3 4 Next
Last modified: May 25, 2011