James D. Schlicher - Page 2

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               After concessions by the parties,1 the only issue for                  
          decision is:  Whether pursuant to section 1034(a), petitioner may           
          defer recognition of the gain from the sale of his principal                
          residence in Livermore, California, in excess of the amount                 
          allowed by respondent.2  We hold he may as set out below.                   
                              FINDINGS OF FACT                                        
               Some of the facts have been stipulated and are so found.               
          The stipulated facts and the accompanying exhibits are                      
          incorporated into our findings by this reference.  At the time              
          the petition in this case was filed, petitioner resided in                  
          Clayton, California.                                                        
               For 1988, petitioner did not file a Federal income tax                 
          return, nor did he pay any Federal income tax for that year,                
          either through withholdings or estimated tax payments.  In 1988,            
          petitioner had taxable interest income of $13,416.  On December             
          31, 1988, petitioner was unmarried, and he did not have any                 
          dependents.  To calculate the deficiency in issue, respondent               
          used the rate applicable to single persons.                                 

          1    For 1988, the taxable year in issue, petitioner concedes               
          that he is liable for additions to tax under secs. 6651(a) and              
          6654(a), computed on any deficiency in tax for which we determine           
          he is liable.                                                               
               Both parties concede that each of the 51 acres of the                  
          Clayton property purchased by the petitioner should be considered           
          to be of equal value.                                                       
          2    All section references are to the Internal Revenue Code in             
          effect for the year in issue, and all Rule references are to the            
          Tax Court Rules of Practice and Procedure, unless otherwise                 
          indicated.  All dollar amounts are rounded to the nearest dollar,           
          unless otherwise indicated.                                                 

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