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Subject:  Re: Deemed Sale of Personal Residence Date:  2/21/2001  3:47 PM
Author:  JAFO31 Number:  46905 of 127617


<<<<However, there is a provision in the "deemed sale" statute that requires the seller to recognize gain on a deemed sale "notwithstanding any provision of the Internal Revenue Code".>>>>

"It's still not quite clear though. I think the intent is clear that it wasn't supposed to be allowed, but the provision in TRA 97 says that the gain must be recognized notwithstanding any other provision of the Code. Sec. 121 provides an exclusion for recognized gain. So, technically, you can still argue that the Sec. 121 exclusion applies, because it isn't a non-recognition provision, it's an exclusion provision."

I believ that I understand the technical difference "recognized" and "recognized but excluded" but intent of the legislature (except for Justice Scalia, IIRC) is still relevant and if the "Notwithstanding provision" was intended to generate revenue in 2002 from Tax Year 2001 income, then ignoring the exclusion comports with Congressional intent. Note - I have not reviewed the Legislative history at all.

Regards, JAFO

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