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accuracy-related penalty under section 6662(a)1 in the amount of
$5,112. After concessions, the issues for decision are:
(1) Whether petitioners may defer recognition of gain
realized from the sale of petitioner husband's former principal
residence under section 1034(a). We hold that they may not.
(2) Whether petitioners are liable for the accuracy-related
penalty under section 6662(a). We hold that they are.
This case was submitted fully stipulated pursuant to Rule
122. The stipulation of facts and attached exhibits are
incorporated herein. Petitioners resided in Newport Beach,
California, at the time the petition was filed in this case.
Petitioners were married on September 4, 1989. Prior to
their marriage, petitioner-husband's (Mr. Kirst) principal
residence was located at 16421 Superior Street, Sepulveda,
California (the Sepulveda property), and petitioner-wife's (Mrs.
Kirst) principal residence was located at 17 Toulon Street,
Newport Beach, California (the Newport Beach property). Neither
petitioner owned an interest in the other's principal residence
prior to their marriage. After the couple were married, Mr.
Kirst changed his principal residence and began residing with
Mrs. Kirst at the Newport Beach property.
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect during the year at issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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