Rowland G. and Valerie J. Pilaria - Page 12




                                       - 12 -                                         
          case inasmuch as petitioners reported the sale of the Solvang               
          property on the Form 2119 attached to their 1995 Federal income             
          tax return which was filed more than 3 years before the issuance            
          of the notice of deficiency.  Respondent counters that: (1)                 
          Section 1034(j) prescribes the period for the assessment of the             
          deficiency–-a deficiency which is attributable to gain realized             
          by petitioners upon the sale of property that they characterized            
          as their principal residence; and (2) that period remained open             
          as of the date that the notice of deficiency was mailed to                  
          petitioners.                                                                
               F.  Analysis                                                           
               The deficiency in this case is attributable in its entirety            
          to respondent’s determination that petitioners’ gross income for            
          1995 included the gain that petitioners realized upon the sale of           
          what they characterized as their principal residence.  Consistent           
          with the plain language of section 1034(j) and section 6504(4),             
          we hold that the period of limitations set forth in section                 
          1034(j) governs the assessment of the deficiency in this case.              
          Because we conclude that the period of limitations remained open            
          at the time the notice of deficiency was issued to petitioners,             
          we shall deny petitioners’ motion for partial summary judgment.             
               A portion of the gain from a sale or exchange of property              
          qualifies for exclusion from gross income under section 121 if              
          the property was owned and used by the taxpayer as his principal            






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  Next

Last modified: May 25, 2011