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Respondent determined a $27,629 deficiency in petitioner’s
2001 Federal income tax. In an answer filed with the Court
respondent asserted an increased deficiency totaling $35,555.
The issues for decision are: (1) Whether petitioner is entitled
to the nonrecognition provisions of section 1031 with respect to
gain realized of $111,715 from the sale of real property; (2) if
petitioner must recognize any portion of the realized gain of
$111,715, whether she is entitled to a theft or casualty loss
relating to the attempted reinvestment of a portion of the gain;
and (3) whether petitioner is entitled to certain claimed
Schedule C, Profit or Loss From Business, deductions.1
Background
Some of the facts have been stipulated, and they are so
found. The stipulation of facts and attached exhibits are
incorporated herein by this reference. At the time the petition
was filed, petitioner resided in San Jose, California.
Petitioner and her now-deceased husband Earl Stewart (Earl)
purchased a condominium on February 24, 1998, in San Diego. The
purchase price was approximately $124,000. Earl died on May 9,
1998. Petitioner and her husband had purchased the condominium
with the intention of residing in it upon retirement. However,
petitioner and Earl did not move into the condominium, and after
1 Other adjustments to Social Security income, itemized
deductions and a personal exemption are computational in nature
resulting from the change in adjusted gross income.
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