Court Opinion

ID: 4479808
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:52.394143+00
Date Added: 2024-06-11T15:03:33.041865
License: Public Domain

Fax, /., dissenting: I respectfully disagree with the majority opinion which holds that the petitioner is not entitled to avail himself of the provisions of section 1034(a) of the Internal Kevenue Code of 1954. My dissent is predicated on the belief that the majority has not only misinterpreted the language of section 1034(a) but has erred with regard to its ultimate findings of fact. The majority opinion is based on the erroneous premise that section 1034(a.) is applicable only when the property sold is the principal residence of the taxpayer at the time of the sale. This premise, however, is not supported by the language of the statute, nor can it be explained by resorting to the legislative history of section 1034. The statute itself merely states, in effect, that— If property (in this section called “old residence”) used by the taxpayer as his principal residence is sold by him after December 31, 1953, and, within a period beginning 1 year before the date of such sale and ending 1 year after such date, property * * * is purchased and used by the taxpayer as his principal residence, gain (if any) * * * shall be recognized only to the extent that the taxpayer’s adjusted sales price * * * of the old residence exceeds the taxpayer’s cost of purchasing the new residence. Section 1034 was intended by Congress to be a relief measure, and as such I believe it is the obligation of the courts, in the absence of a congressional expression to the contrary, to construe such legislation with a view toward liberality. Since the statute itself imposes no restrictions on the word “used,” I believe this Court, under the circumstances of this case, should likewise decline to do so. In the instant case, there is no dispute that the Chappaqua property was used at least until 1950 as petitioner’s principal residence. Such being the case, there appears to be no reason why petitioner should be denied the benefits of section 1034. However, even if the majority is correct in its construction of the word “used” in the statute, I am of the opinion that the Chappaqua property was petitioner’s principal residence at the time of the sale. The issue here centers on whether petitioner actually abandoned Chappaqua as his principal residence in 1953. The majority’s finding that petitioner did abandon Chappaqua as his principal residence in 1953 stems by and large from the fact that petitioner at that time removed his furniture having an insured value of $60,000 from Chap-paqua. The fact that petitioner removed his furniture does not, under the circumstances of this case, constitute an act of abandonment of a residence. Since the furniture was extremely valuable and petitioner was now living full time in a rented apartment in New York City, it would not be unreasonable for petitioner to seek to protect the furnishings of his house against the risks of fire, theft, etc., which are more likely to occur when premises are unoccupied for periods of time. Furthermore, considering that petitioner refused to sell his Chappaqua property until he could find and purchase a suitable farm and that be refused to integrate bis Cliappaqua furniture, except for one-bedroom suite, into the New York City apartment, it would seem that petitioner’s contention that the New York apartment he rented was only a temporary residence and that Chappaqua was his principal residence is supported by the record. The fact that petitioner was not actually living in Chappaqua at the time of its sale does not bar the use of section 1034. See Ralph L. Trisko, 29 T.C. 515, 519 (1957). The majority also concluded that the “new residence” was not used by petitioner as his principal residence. Considering the petitioner’s reasons for renting and maintaining the New York apartment, the nature of the apartment in view of petitioner’s income and position, the circumstances surrounding the acquisition of the farm, the reasons for its acquisition, the furnishing of it with the Chappaqua furniture and the fact that petitioner and his wife traveled to the farm every weekend and holiday, it would appear that the finding of the majority is contrary to the facts revealed by the record. Witiiey, DeenNen, and Dawsoh, JJ., agree with this dissent.