- 5 - included in their gross income and subject to tax for 1995.3 Respondent concluded that petitioners were not eligible for the tax benefits of section 121 or section 1034 because the Solvang property was not their principal residence at the time it was sold. Petitioners filed with the Court a joint petition for redetermination. The petition included the allegation that respondent’s determination that the Solvang property was not petitioners’ principal residence at the time it was sold is barred by the general 3-year period of limitations under section 6501(a). Respondent filed an answer to the petition including the allegation that the deficiency, which is attributable to respondent’s determination that the gain that petitioners realized on the sale of the Solvang property was includable in their gross income for 1995, is subject to the period of limitations prescribed in section 1034(j). As indicated, petitioners filed a motion for partial summary judgment, to which respondent filed an objection. The matter was called for hearing at the Court’s motions session in Washington, D.C. Counsel for respondent appeared at the hearing and offered 3 Respondent determined that petitioners were required to report a gain of $428,087 on the sale of the Solvang property as follows: Sale price ($530,000) minus expenses of sale ($18,413) minus adjusted basis ($83,500). As a consequence of the increase in petitioners’ adjusted gross income, petitioners were subject to related adjustments attributable to the phase-out of personal exemptions and itemized deductions.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
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