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(C) a failure to make such purchase within such
period; and
(2) such deficiency may be assessed before the
expiration of such 3-year period notwithstanding the
provisions of any other law or rule of law which would
otherwise prevent such assessment. [Emphasis added.]
Petitioners do not dispute that their tax liability was what
they themselves reported on their amended return. Petitioners
first contend, however, that respondent assessed them for their
unpaid liability beyond the 3-year period of limitations for
assessment. See sec. 6501(a). In support of this contention,
petitioners contend that the 3-year period of limitations began
on or about April 14, 1995, when petitioners filed their 1994 tax
return, and expired on or about April 14, 1998. Respondent,
however, argues that the assessment of petitioners’ unpaid
liability was timely under section 1034(j). We agree with
respondent.
On or about April 14, 1995, petitioners timely filed their
1994 tax return notifying respondent of their intention to roll
over the gain from the sale of their home into a new residence.
See sec. 1034(a). Petitioners, however, did not at any time roll
over their gain into the purchase of a new home. On March 22,
2001, petitioners filed an amended return notifying respondent
that they failed to purchase a replacement home within the
specified time period under section 1034(a), and petitioners
reported the gain realized from the sale of their home in 1994.
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