William T. Shipes, Jr. and Kathy D. Shipes - Page 8

                                        - 8 -                                         
          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.                                                  

Page:  Previous  1  2  3  4  5  6  7  8  

Last modified: May 25, 2011