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(1) the taxpayer has attained the age of
55 before the date of such sale or exchange,
and
(2) during the 5-year period ending on
the date of the sale or exchange, such
property has been owned and used by the
taxpayer as his principal residence for
periods aggregating 3 years or more.
Section 121(b)(1) limits the amount of the exclusion to $125,000
or $62,500 in the case of a separate return by a married
taxpayer.
Section 121(c) describes the process for making an election
under the provision in pertinent part as follows:
SEC. 121(c). Election.–-An election under
subsection (a) may be made or revoked at any time
before the expiration of the period for making a claim
for credit or refund of the tax imposed by this chapter
for the taxable year in which the sale or exchange
occurred, and shall be made or revoked in such manner
as the Secretary shall by regulations prescribe. * *
*[5]
Unlike section 1034, section 121 does not contain a separate
provision for the period of limitations on assessment. We
5 In conjunction with sec. 121(c), we observe that sec.
6511(a) provides in pertinent part:
SEC. 6511(a). Period of Limitation on Filing
Claim.–-Claim for credit or refund of an overpayment of
any tax imposed by this title in respect of which tax
the taxpayer is required to file a return shall be
filed by the taxpayer within 3 years from the time the
return was filed or 2 years from the time the tax was
paid, whichever of such periods expires the later, or
if no return was filed by the taxpayer, within 2 years
from the time the tax was paid. * * *
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