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From our perspective, the disparity between respondent's
circumstantial evidence and the petitioners' evidence is due to
petitioners' attempt to show that the improvements to the Fairway
residence were begun and/or completed prior to June 21, 1990.
Petitioners make this argument in order to rollover additional
gain in the amount of $112,4704 in improvements to Fairway. By
contending that they continuously used the Fairway residence from
May 1990 on, petitioners counter one of respondent's arguments
that the Fairway residence was uninhabitable due to the extensive
improvements and disruption to the property. In an attempt to
show that the Fairway residence's improvements were begun prior
to June 21, 1990, petitioners contended that they had moved into
the Fairway residence and stayed there throughout the period
under consideration. This contention is apparently to give the
appearance that the Fairway residence did not need or undergo
extensive renovations after June 21, 1990.
Although petitioners had purchased what they intended to be
the permanent replacement residence (Fairway) 7 months before the
June 21, 1990, deadline under section 1034, the Fairway residence
was older and in need of extensive internal renovations.
Petitioners were at all times acutely aware of the deadline and
attempted to make plans to improve the Fairway residence prior to
4 The $112,470 would represent nearly one-half of a $238,380
gain realized on the Freemont property for which petitioners seek
rollover under sec. 1034.
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