Paul L. Blanton and Cynthia D. Blue-Blanton - Page 15

                                        -15-                                          
          for 3 years.  Petitioners contend that Schmitz erroneously                  
          checked that box.  Petitioners did not call Schmitz to explain              
          why he checked the box indicating that petitioners had not owned            
          and used the W. 22d property for 3 years.  Petitioners did not              
          explain why they did not immediately correct the return when they           
          noticed what Schmitz had done.  Although this is not compelling             
          evidence in isolation, it adds some weight to the other evidence            
          that petitioners had not owned and used the Spokane property for            
          3 years when they sold it in 1992.  See Bank of the West v.                 
          Commissioner, 93 T.C. 462, 468 (1989); Kenyatta Corp. v.                    
          Commissioner, 86 T.C. 171, 182 (1986), affd. per order 812 F.2d             
          577 (9th Cir. 1987); McShain v. Commissioner, 71 T.C. 998, 1010             
          (1979).                                                                     
               4.   Conclusion                                                        
               Income tax provisions which exempt taxpayers under given               
          circumstances from paying taxes or permit them to postpone taxes            
          are strictly construed.  Commissioner v. Baertschi, supra at 498-           
          499 (the taxpayer/sellers were not entitled to section 1034                 
          deferral).  We conclude that petitioners did not meet the                   
          statutory requirement that they own and use the Spokane property            
          for 3 years.                                                                
               A taxpayer seeking to exclude gain on the sale of property             
          must own and use that property as his or her principal residence            
          for 3 years or more.  Sec. 121(a)(2).  Petitioners used the W.              
          22d property for more than 3 years.  However, they did not bear             
          enough of the benefits and burdens of ownership before title                



Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next

Last modified: May 25, 2011