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such prejudice exists, it is of respondent’s own making. Any
such prejudice, however, is speculative, premised as it is on the
supposed tax consequences in a year not before us of a legal
determination that we decline to reach. The only year before us
is 1994, and we confine our determinations to that year. See
Christensen v. Commissioner, T.C. Memo. 1996-254, affd. without
published opinion 142 F.3d 442 (9th Cir. 1998).
Moreover, petitioners’ receipt argument is based on the
application of section 1031 and respondent’s regulations
thereunder–-the same section upon which the parties have based
their positions from the outset. See Ware v. Commissioner,
supra. In invoking the application of these mandatory provisions
of the section 1031 regulations, petitioners appeal to the
correct application of the law on the basis of the record
presented. Neither party has suggested that the record contains
insufficient facts to permit us to dispose of the case on the
grounds of petitioners’ alternative argument. We conclude that
the record is sufficient for this purpose and that we may
properly decide this case on the grounds raised in petitioners’
alternative argument.4
4 We are mindful that in Chase v. Commissioner, 92 T.C. 874,
883 (1989), this Court rejected the taxpayers’ alternative
argument, raised for the first time on brief, that if sec.
1031(a) were inapplicable to the transaction in question, then
they should be allowed to elect installment sale treatment under
former sec. 453. The Court based its holding partly on the
(continued...)
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