Gates v. Commissioner
United States Tax Court
Ps owned and used a house as a principal residence for 2 years. Ps wanted to enlarge and remodel the house but were advised by an architect that more stringent building and permit restrictions had been enacted since the house was built. In 1999, rather than remodel the house, Ps voluntarily demolished it and constructed a new house on the property.
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Ps owned and used a house as a principal residence for 2 years. Ps wanted to enlarge and remodel the house but were advised by an architect that more stringent building and permit restrictions had been enacted since the house was built. In 1999, rather than remodel the house, Ps voluntarily demolished it and constructed a new house on the property. Ps never occupied the new house, and in 2000 they sold it for $ 1,100,000. Ps realized capital gain of $ 591,406 on the sale of the new house. On their untimely 2000 Federal income tax return Ps did not report any of the gain from the sale of the…
1DissentHalpern, J.
There is adequate ground for the majority’s conclusion that, to qualify for the section 121 exclusion, the taxpayer must sell not only the land on which her principal residence is located but also the principal residence itself. Nevertheless, I think that there is also adequate ground for concluding that petitioners’ sale of the new house qualified for that exclusion.
Interpretation Contrary to the Remedial Intent of Section 121(a)
The gain exclusion rule of section 121(a) applies if three conditions are met: (1) There must be a sale or exchange (without distinction, sale); (2) the sale must be…
2Cases cited5 opinions
- United States v. BurkeSupreme Court of the United States · 1992
- Commissioner v. SchleierSupreme Court of the United States · 1995
- Helvering v. BlissSupreme Court of the United States · 1934
- Samuel E. Bogley and Anita C. Bogley v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1959
- Bogley v. CommissionerUnited States Tax Court · 1958