Douglass H. and Suzanne M. Bartley - Page 13

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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,           
                        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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