Donna M. Bokman - Page 3

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               Respondent determined a deficiency in petitioner’s Federal             
          income tax of $35,230 for the taxable year 1995.                            
               The issue for decision is whether petitioner made a valid              
          election under section 453(d) not to report the sale of a                   
          residence using the installment method.                                     
               Some of the facts have been stipulated and are so found.               
          The stipulations of fact and the attached exhibits are                      
          incorporated herein by this reference.  Petitioner resided in               
          Byron, California, on the date the petition was filed in this               
               Petitioner and her former husband, Joseph Bokman, were                 
          divorced in 1986.  Petitioner purchased a residence in Byron,               
          California, on March 23, 1993.  She then sold a joint tenancy               
          interest in this residence to Mr. Bokman on May 17, 1995.  Mr.              
          Bokman received this interest in exchange for a secured note                
          requiring him to pay petitioner $2,083.33 a month in interest for           
          a period of 10 years, followed by the payment of the principal              
          amount of $250,000.  Payment of interest was to commence on                 
          January 1, 1996.  The note was secured using a deed of trust on             
          Mr. Bokman’s interest in the residence.  Mr. Bokman made the                
          following payments during 1996:                                             

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