Delay on Sale of Residence Does Not Foreclose Rollover

Article excerpt

A taxpayer who purchased a home with her boyfriend in 1975 moved out of that home in 1979 due to the deterioration of the relationship. She left her furniture and other belongings in the house and moved to Baltimore, renting an apartment there. Meanwhile, her boyfriend stayed in the house in Los Angeles.

Two months after her move to Baltimore, she asked to be transferred back to Los Angeles, but her employer refused. For the next three years she returned to Los Angeles periodically, staying in the residence for periods from two weeks to two months. She continued to vote and pay taxes there. She also made all mortgage, tax, and insurance payments on the residence, since her boyfriend refused to do so.

In 1982 she moved out of the residence permanently. She wanted to sell it, but her boyfriend, who was joint owner refused. She then began legal proceedings for partition, which were not completed until 1986, the year in which she finally sold the residence. In Green v. Commissioner, (No. 2055-90, T.C. Memo 1992-439, 8/3/92), the Tax Court ruled that in this case the taxpayer was entitled to the benefit of nonrecognition of gain under Sec. …