Robert E. Corrigan - Page 25

                                       - 25 -                                         
          section 62(a)(1) provides that such deductions, being                       
          attributable to petitioner’s employment, are allowable as                   
          itemized deductions from adjusted gross income.  See sec. 63(a).            
               Accordingly, we find that subject to certain limitations,              
          petitioner is entitled to deduct itemized employee deductions on            
          Schedules A of $289,926 for 1987 and $135,000 for 1988.                     
               V.  Sale of Residence                                                  
               Under former section 1034,10 which was in effect for                   
          petitioner’s 1987 tax year, taxpayers were able to defer gain               
          realized from the sale of their principal residence if they                 
          purchased a replacement residence and met certain other                     
          conditions.  Section 1034, in pertinent part, provided:                     
                    SEC. 1034(a).  Nonrecognition of Gain.–-If                        
               property (in this section called “old residence”) used                 
               by the taxpayer as his principal residence is sold by                  
               him and, within a period beginning 2 years before the                  
               date of such sale and ending 2 years after such date,                  
               property (in this section called “new residence”) is                   
               purchased and used by the taxpayer as his principal                    
               residence, gain (if any) from such sale shall be                       
               recognized only to the extent that the taxpayer’s                      
               adjusted sales price (as defined in subsection (b)) of                 
               the old residence exceeds the taxpayer’s cost of                       
               purchasing the new residence.                                          
               Respondent’s sole contention with regard to the sale of                
          petitioner’s residence is that if petitioner abandoned the Walnut           
          Creek residence and had a new “principal residence” before the              


               10 Sec. 1034 was repealed in connection with the Taxpayer              
          Relief Act of 1997, Pub. L. 105-34, sec. 312(a) and (b), 111                
          Stat. 836, 839.                                                             





Page:  Previous  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  Next

Last modified: May 25, 2011