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as the Charleston property; however, the Form 4562, Depreciation
and Amortization, attached to their return, listed the Charleston
property as being used 100 percent for rental purposes. On the
Form W-2, DOA lists petitioners' residence as the Star City
address.
Even assuming, arguendo, that for purposes of section 1034
petitioners' old residence was the California property and their
new residence was the Charleston property, petitioners would not
qualify for a deferral under section 1034. Petitioner testified
that he sold the California property on February 1, 1989, and
purchased the Charleston property on March 31, 1983.
Consequently, petitioners would not be permitted to defer the
gain because they did not purchase the Charleston property within
2 years before or after the date on which they sold the
California property. The time requirement of section 1034(a)
must be strictly complied with. Bayley v. Commissioner, 35 T.C.
288 (1960). If the Morgantown property was petitioners' new
residence, petitioners are also not entitled to deferral under
section 1034 because they offered no evidence regarding the date
the Morgantown property was purchased or how much they paid.
Respondent is sustained on this issue.
Issue 8. Addition to Tax
The final issue for decision is whether petitioners are
liable for an accuracy-related penalty for the taxable year 1990.
Section 6662(a) and (b)(1) imposes an accuracy-related penalty
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