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Sec. 1001(c). However, if a taxpayer sells his or her principal
residence, and within 2 years of the date of the sale buys and
uses another principal residence, gain from the sale is
recognized only to the extent that the taxpayer's adjusted sale
price for the old residence exceeds the cost of the new
residence. Sec. 1034(a). The parties dispute whether
petitioners sold the Blue Lake property within 2 years of
July 19, 1989, the date that petitioners bought their Portland
residence.
A. When Petitioners Sold the Blue Lake Property for Purposes
of Section 1034
Whether a sale is complete for Federal tax purposes depends
on all the facts and circumstances. Derr v. Commissioner, 77
T.C. 708, 724 (1981); Baird v. Commissioner, 68 T.C. 115, 124
(1977); Clodfelter v. Commissioner, 48 T.C. 694, 700-701 (1967),
affd. 426 F.2d 1391 (9th Cir. 1970). We consider the following
factors in deciding whether a sale occurred: (a) Whether the
seller transferred legal title; (b) whether the benefits and
burdens of ownership passed to the buyer; (c) whether the owner
had a right under the agreement to require the other party to buy
the property; and (d) how the parties treated the transaction.
Grodt & McKay Realty, Inc. v. Commissioner, 77 T.C. 1221, 1237-
1238 (1981); Derr v. Commissioner, supra at 724; Baird v.
Commissioner, supra at 124; Merrill v. Commissioner, 40 T.C. 66,
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