- 2 - Court with computations for entry of decision under Rule 155.1 Differing computations were proffered, and we consider here which computation is correct. In our earlier opinion, we held that petitioners, under section 1034, were entitled to roll over a portion of the gain on the sale of their residence. We also specifically held that petitioners were not entitled to roll over $112,470 of improvements that were not commenced prior to the 2- year replacement deadline. Respondent’s computation is based on the premise that the $112,470 was included in petitioners’ original reporting of this transaction and that its elimination would therefore increase any income and any resulting deficiency. Petitioners, conversely, contend that respondent’s premise is incorrect. The difference in the parties’ computations arises from petitioners’ contention that the record does not expressly show that petitioners had included the $112,470 in their attempt to defer gain under section 1034 in the questioned transaction. Petitioners further contend that respondent, who bore the burden of proof on that aspect of the case, did not introduce evidence expressly showing that the improvements proven at trial were ever included in the replacement cost petitioners reflected on their return. Respondent asserts that petitioners’ argument is not a 1 Rule references are to the Tax Court Rules of Practice and Procedure, and section references are to the Internal Revenue Code in effect for the years in issue.Page: Previous 1 2 3 4 Next
Last modified: May 25, 2011