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this property.” All claims were then dismissed with prejudice,
and, in September of 1996, payment of the $100,000 was made by
the State.
Discussion
We must decide whether the $65,000 received by petitioner in
condemnation of her residence is taxable to the extent that the
payment exceeded her basis in the property.
Petitioner contends that the condemnation proceeds are
exempt from taxation pursuant to the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970,
Pub. L. 91-646, 84 Stat. 1894, presently codified at 42 U.S.C.
secs. 4601-4655 (1994) (Relocation Act). According to
petitioner, the Relocation Act mandates that relocation payments
shall not be treated as income for tax purposes, and the $65,000
at issue is in fact a portion of the relocation assistance she
received from the State. Hence, in petitioner’s view, the
subject funds can have no tax consequences.
Conversely, respondent asserts that the Relocation Act does
not exempt from Federal income tax the $65,000 received by
petitioner. Respondent maintains that the Relocation Act neither
applies to nor addresses the tax treatment of amounts
representing the acquisition cost or just compensation paid when
property is taken for public use. Rather, respondent interprets
the Relocation Act to remove only payments which are in addition
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