T.C. Memo. 1999-347
UNITED STATES TAX COURT
LEE F. PARKER AND DIANE K. PARKER, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9590-98. Filed October 20, 1999.
For purposes of deferring gain on the sale of their
former residence under sec. 1034, I.R.C., Ps sought to
include expenditures made in the construction of an
unfinished dwelling structure. The structure was located on
the same lot as the new residence purchased by Ps, and Ps
intended eventually to use both buildings for their
residential purposes. At the close of the 2-year statutory
period for reinvestment and deferment of gain, Ps had not
yet moved into the new structure and were instead using it
largely as a workshop area. On the facts, Held: Ps have not
placed the structure into residential use as required by
sec. 1034, I.R.C., and are thus not entitled to include its
costs in order to defer recognition of gain on the sale of
their former residence. R’s determination of a deficiency
is sustained.
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