Elam v. Commissioner
United States Tax Court
Held: Petitioners must recognize gain on the sale of their former principal residence to the extent that the adjusted sales price exceeds the cost of purchasing new property and the existing improvements thereon plus the cost of erecting a guesthouse, which petitioners completed and used as a principal residence within 18 months after the sale.
Read the full summary
Held: Petitioners must recognize gain on the sale of their former principal residence to the extent that the adjusted sales price exceeds the cost of purchasing new property and the existing improvements thereon plus the cost of erecting a guesthouse, which petitioners completed and used as a principal residence within 18 months after the sale. Sec. 1034(a) and (c)( 5), I.R.C. 1954. No part of the cost of building the main house on the property may be offset against such adjusted sales price because the main house was not used as a principal residence within the 18-month period.
1Opinion of the Court
Tietjens, Judge:
The Commissioner determined a deficiency of $11,328.49 in the income tax of petitioners for the calendar year 1966, which results from his increasing gross income by the amount of gain petitioners realized on the sale of their 'former principal residence. The sole issue is whether section 1034,1.E.C. 1954,1 requires nonrecognition of part of the gain and to what extent if any the purchase price of a new residence and the costs petitioners incurred in constructing a new dwelling house should be taken into account in computing the amount of gain currently taxable.
FINDINGS OF FACT
2Cases cited4 opinions
- Stolk v. CommissionerUnited States Tax Court · 1963
- Bayley v. CommissionerUnited States Tax Court · 1960
- Union Trust Co. of San Francisco v. WardellSupreme Court of the United States · 1922
- United States v. Edwin L. Sheahan and Deborah M. SheahanCourt of Appeals for the Fifth Circuit · 1963
3Cited by10 opinions
- Shaw v. CommissionerUnited States Tax Court · 1978
- Collins v. CommissionerUnited States Tax Court · 1979
- Elam v. CommissionerUnited States Tax Court · 1972
- Gelinas v. CommissionerUnited States Tax Court · 1976
- Haydin v. CommissionerUnited States Tax Court · 1983
5 more not listed; retrieve them via the Exa API.