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Moreover, there is no evidence in the record that petitioner wife
transferred her interest in her residence to herself and her
husband in consideration of improvements to be made to the
residence. Petitioners have failed to show that petitioner
husband actually paid for more than half the improvements to the
King of Prussia property, and it is stipulated that none was paid
for from an account solely in the name of petitioner husband.
Petitioner husband contends that section 1034 does not
require the proceeds from the old residence to be invested in the
new residence. Petitioner husband contends that there is no
provision in section 1034 or the regulations requiring that costs
attributable to a new residence be split between husband and
wife. However section 1034 requires that a taxpayer who wishes
to defer recognition on all of the gain realized on the sale of
an old residence must purchase a new residence for an amount
greater than or equal to the adjusted sales price of the old
residence. Petitioner husband has not proved that he provided
more than half of the cash paid in the reconstruction of the King
of Prussia property. Accordingly, respondent’s determination on
this point is sustained. As we have found that petitioner
husband did not prove that he provided more than half of the
amounts that were expended for construction and reconstruction
for the King of Prussia property, we need not address
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