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Internal Revenue Code, recognizing that the disposition of one
residence and the acquisition of another were often necessitated by
a change in the size of the taxpayer's family, a change in the
taxpayer's place of employment, or other circumstances beyond the
taxpayer's control. As the Ways and Means Committee report, H.
Rept. 586, 82d Cong., 1st Sess. (1951), 1951-2 C.B. 357, 377-378,
explained:
H. Gain From Sale Or Exchange Of The
Taxpayer's Residence.
this bill amends the present provisions
relating to a gain on the sale of a taxpayer's
principal residence so as to eliminate a
hardship under existing law which provides that
when a personal residence is sold at a gain the
difference between its adjusted basis and the
sale price is taxed as a capital gain. The
hardship is accentuated when the transactions
are necessitated by such facts as an increase
in the size of the family or a change in the
place of the taxpayer's employment. In these
situations the transaction partakes of the
nature of an involuntary conversion. * * *
See Clapham v. Commissioner, 63 T.C. 505, 511 (1975); see also S.
Rept. 781, 82d Cong., 1st Sess. (1951), 1951-2 C.B. 458, 482-484,
566-570; Staff of Joint Comm. on Taxation, Summary of Provisions of
the Revenue Act of 1951, at 389-310 (J. Comm. Print 1951), 1951-2
C.B. 287, 309-310.
Over the years, the governing Code provision has changed
slightly. See H. Rept. 1337, 83d Cong., 2d Sess. A268-A269 (1954).
The rules under section 1034 during the year in issue are
substantially similar to those Congress adopted in 1951. The major
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