Michele Anthony - Page 6

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          mortgage of the Compton residence to purchase the Lee’s Summit              
          residence in order to avoid gain recognition in anticipation of             
          selling the Compton residence.  Second, she purchased the new               
          residence within several months of the time period.  Third, the             
          proceeds from the sale were used solely for home repairs and                
          related costs.  Despite these reasons, a relaxation of the                  
          express requirements of the statute is not within our                       
          jurisdiction:  We must apply the law as it is written by                    
          Congress.  See, e.g., Waters v. Commissioner, T.C. Memo. 1995-535           
          (“the period fixed by statute is a strict requirement for                   
          obtaining the benefits of section 1034, and * * * we are without            
          authority to weigh the merits of the events precipitating delay             
          to determine whether the time limits may be waived or extended”).           
               We uphold respondent’s determination that petitioner is not            
          entitled to deferral of gain recognition on the sale of the                 
          Compton residence under section 1034(a).4                                   
               We next turn to an examination of the amount of gain                   
          petitioner recognized.  Under section 1001, gain on the sale of             
          property generally is recognized in an amount equal to the excess           
          of the amount of money received over the adjusted basis of the              
          property.  Under sections 1011(a) and 1012, the adjusted basis              

          4We need not discuss respondent’s alternative argument (and                 
          the position taken in the notice of deficiency) that the Compton            
          residence ceased being petitioner’s personal residence and                  
          instead became rental property prior to its sale.                           

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