- 12 -
(1963), affd. 326 F.2d 760 (2d Cir. 1964), this Court stated that
The elements of residence are the fact of abode and the
intention of remaining, and the concept of residence is
made up of a combination of acts and intention.
Neither bodily presence alone nor intention alone will
suffice to create a residence. * * *
* * * * * * *
The phrase "used by the taxpayer as his principal
residence" means habitual use of the old residence as
the principal residence. [Emphasis added.]
The term "principal residence" means one's chief or main place of
residence. Id. at 351. In general, the property sold must be
the principal residence at the time it is sold. Thomas v.
Commissioner, 92 T.C. 206, 243 (1989); Aagaard v. Commissioner,
56 T.C. 191, 202-203 (1971).
Moreover, where part of the old residence sold was used as
the taxpayer's principal residence and part was used for business
purposes,2 only the portion of the gain allocable to the
residential use is entitled to section 1034(a) nonrecognition.
Richards v. Commissioner, T.C. Memo. 1993-422; Beckwith v.
Commissioner, T.C. Memo. 1964-254; Grace v. Commissioner, T.C.
Memo. 1961-252.
2 Respondent argues that 20 The Point was a business asset
and that petitioners never abandoned their business use at 20 The
Point. Therefore, respondent contends that 20 The Point
continued to be used as a business asset, and not as petitioners'
principal residence. Because, as discussed later, we determine
that 20 The Point was not petitioners' principal residence, we do
not need to make an allocation of business and personal use at 20
The Point.
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