Douglass H. and Suzanne M. Bartley - Page 17

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          2) 505, 555-557.  Congress believed that a rollover under section           
          1034 may not be feasible because the older taxpayer often wants to          
          purchase a less expensive home or move to a rented residence at             
          another location and may also need the proceeds from the sale of            
          the old residence to meet living expenses in the retirement years.          
               In Woolf v. Commissioner, T.C. Memo. 1981-286, we held that a          
          rational basis existed for allowing the section 121 exclusion, and          
          thus the exclusion did not result in any constitutional violations.         
          We reasoned that in the case of certain older individuals, Congress         
          made a reasonable attempt to provide for those individuals who,             
          because of their age and particular situation in life, may wish to          
          change residences. We stated: "We, accordingly,  find  no                   
          constitutional violation resulting from the fact that * * * [the            
          taxpayers'] tax consequences may have been different from those of          
          other individuals who sold their personal residences".9  Id.  "'No          

               9    In fact, there were a number of other sections in the             
          Internal Revenue Code that provided for differing tax treatment             
          depending upon the taxpayer's age.  For instance, a taxpayer who            
          attained age 25 before the close of the computation year and was            
          not a full-time student during the 4 taxable years commencing               
          upon attaining the age of 21 and ending with the computation year           
          would be eligible for income averaging.  Former sec.                        
          1303(c)(2)(A) (Tax Reform Act of 1986, Pub. L. 99-514, sec.                 
          141(a), 100 Stat. 2117, repealed sec. 1303, applicable to tax               
          years beginning after Dec. 31, 1986); see Baldwin v.                        
          Commissioner, 84 T.C. 859, 869 (1985).                                      
               In addition, if a taxpayer fails to roll over distributed              
          retirement funds within 60 days, and the distribution is made               
          before the date the taxpayer attains the age of 59-1/2, and none            
          of the other exceptions in sec. 72(t)(2) applies, the tax on the            
          distribution is increased by an amount equal to 10 percent of the           

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