Martin Feldman and Lynne Z. Gold-Bikin - Page 9

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          1034(g) to be treated as a single taxpayer for purposes of                  
          determining the old residence's adjusted sale price, the new                
          residence's cost, the gain rolled over, and the new residence's             
          basis.  Sec. 1034(g); sec. 1.1034-1(f), Income Tax Regs.  A                 
          section 1034(g) special election cannot be made in this case                
          because both spouses did not reside in the husband’s former                 
          residence.                                                                  
               In February 1989, petitioner wife transferred title in the             
          King of Prussia property, which was owned solely by her, to                 
          herself and her husband, for consideration of $1.  The deed that            
          transferred ownership in the King of Prussia property did not               
          specify whether the tenancy that was created was a joint tenancy            
          or a tenancy by the entirety.  Under Pennsylvania law, when                 
          married persons take title to a piece of property in the name of            
          husband and wife, a presumption arises that such title vested in            
          them by entirety, and because there is nothing in this record               
          contradicting that presumption, we find that such conveyance                
          created a tenancy by the entirety in the new residence.  See                
          Commissioner v. Estate of Bosch, 387 U.S. 456 (1967); In re                 
          Meyer’s Estate (No. 1), 232 Pa. 89, 81 A. 145 (1911).  The                  
          transfer of petitioner wife's interest in her residence to                  
          petitioner husband constituted a nontaxable gift under section              
          1041.5  Pursuant to section 1041, the basis of the transferee               

          5SEC. 1041.  TRANSFERS OF PROPERTY BETWEEN SPOUSES OR                       
                                                             (continued...)           




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