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expired. The taxpayer has the responsibility to take precautions
necessary to prevent loss of the deferral option by requesting an
extension as provided in section 1033(a)(2)(B)(ii).
In the instant case, Mr. Shipes first received conversion
gain in 1986. He subsequently received additional conversion
gain in 1991. Because petitioners did not apply to extend the
end date of the replacement period, the replacement period ended
on December 31, 1988. Sec. 1033(a)(2)(B). It follows that the
additional conversion proceeds were received 2 years and 49 days
after the end of the replacement period. Accordingly,
petitioners are not entitled to defer recognition of the gain
realized from the additional conversion proceeds.5
To reflect to foregoing,
Decision will be
entered for respondent.
5Having found for respondent on the issue of the length of
the replacement period, we do not discuss whether the property
petitioners purchased in 1993 qualifies as replacement property
for purposes of sec. 1033.
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Last modified: May 25, 2011