- 19 -
gross income under section 121. However, on their second Form
2119, filed May 26, 1998, petitioners reported the purchase price
of their new principal residence and notified respondent of their
election to exclude $125,000 of gain under section 121 and to
defer recognition of the balance of the gain under section 1034.
Under the circumstances, the filing of petitioners’ second
Form 2119 on May 26, 1998, satisfied the notice requirement under
section 1034(j)(1)(A) and initiated the running of the 3-year
period of limitations on assessment with regard to both
petitioners’ election to exclude $125,000 of gain from their
gross income under section 121 and their claim to defer
recognition of the balance of the gain under section 1034(a).
See sec. 1.1034-1(i)(2), Income Tax Regs. It follows that the
3-year period of limitations remained open on March 20, 2001--the
date the notice of deficiency in this case was issued to
petitioners.
Consistent with the foregoing, we shall deny petitioners’
motion for partial summary judgment. To reflect the foregoing,
An order will be issued
denying petitioners’ motion for
partial summary judgment.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Last modified: May 25, 2011