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notice of deficiency for 1994 or otherwise have an opportunity to
dispute their unpaid liability for that year. Consequently, we
shall review de novo. Sego v. Commissioner, 114 T.C. 604, 610
(2000).
For the year in issue, section 1034(a) provides, in general,
for the complete nonrecognition of gain if the replacement
residence having a cost at least equal to the adjusted sale price
of the old residence was purchased within 2 years before or after
the sale of the old principal residence.11 Section 1034(j)
governs the statutory period for the assessment of any deficiency
attributable to a gain from the sale of a taxpayer’s primary
residence. Section 1034(j) provides, in pertinent part, as
follows:
(1) the statutory period for the assessment of any
deficiency attributable to any part of such gain shall
not expire before the expiration of 3 years from the
date the Secretary is notified by the taxpayer (in such
manner as the Secretary may by regulations prescribe)
of--
* * * * * * *
(B) the taxpayer’s intention not to purchase a new
residence within the period specified in subsection
(a), or
11 Sec. 312(b) of the Taxpayer Relief Act of 1997 (TRA
1997), Pub. L. 105-34, 111 Stat. 839, repealed the sec. 1034
rollover provision generally effective for sales and exchanges of
principal residences after May 6, 1997. TRA 1997 sec. 312(a),
111 Stat. 836, replaced the sec. 1034 rollover provision with a
revised and expanded sec. 121 generally effective for sales and
exchanges after May 6, 1997.
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