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a dollar is what Congress says it is, without regard to intrinsic
value or lack thereof"), affd. without published opinion 578 F.2d
1383 (8th Cir. 1978); Notter v. Commissioner, T.C. Memo. 1982-96.
Accordingly, we dismiss petitioners' argument with regard to the
effect of inflation.
Finally, petitioners argue that because section 1034 does not
apply to losses, there is "disparate treatment" between homeowners
and businesses. We recognize that because a residence is, by
definition, for personal use, a loss incurred on its sale is not
deductible. See secs. 165, 262. However, a loss is recognizable
on the sale of a home if it was converted to rental property prior
to its sale. See sec. 165(c).
Although petitioners' nominal gain may or may not equal their
real gain in an economic sense, neither the Constitution nor tax
laws "embody perfect economic theory". See Weiss v. Wiener, 279
U.S. 333, 335 (1929).
d. Conclusion
On the basis of the foregoing analysis, we hold that the gain
realized from the sale of petitioners' Mequon residence is taxable
in 1993. Moreover, respondent's computation of gain is sustained.
Issue 2. Section 6662(a) Accuracy-Related Penalty
The second issue is whether petitioners are liable for the
section 6662(a) accuracy-related penalty for negligence. Section
6662 imposes an accuracy-related penalty for negligence and
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