                            T.C. Memo. 1999-245



                          UNITED STATES TAX COURT



                 EVELYNN S. STILZ, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 16778-98.                           Filed July 28, 1999.



     Evelynn S. Stilz, pro se.

     Linsey D. Stellwagen, for respondent.



               MEMORANDUM FINDINGS OF FACT AND OPINION


     RUWE, Judge:    Respondent determined the following

deficiencies in petitioner's Federal income taxes:

       1991       1992         1993      1994        1995      1996
     $19,477     $4,106       $3,746    $3,836      $3,814    $3,761
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     After concessions, the remaining issue for decision is

whether petitioner's gain from the sale of her residence in 1991

must be included in her taxable income for that year.

                           FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.    Petitioner resided in

Lexington, Kentucky, when the petition was filed.

     Petitioner was divorced in February 1986.    Before the

divorce, petitioner and her husband were joint owners of a house

located at 500 Clinton Road, Lexington, Kentucky (the house).

Pursuant to the divorce decree and property agreement,

petitioner's ex-husband was required to convey his interest in

the house to petitioner.

     Petitioner timely filed a 1991 Federal income tax return.

The 1991 return includes Form 2119, Sale of Your Home, which

discloses that petitioner sold the house on July 2, 1991.      The

Form 2119 reports the amount realized on the sale as $197,142,

the basis as $127,831, and the gain on sale as $69,311.

Petitioner indicated on her Form 2119 that she intended to

replace her house within the replacement period provided by

section 1034(a).1   Section 1034(a) provided, in general, for the


     1
      Unless otherwise indicated, all section references are to
                                                   (continued...)
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complete nonrecognition of gain if a replacement residence having

a cost at least equal to the adjusted sale price of the old

principal residence was purchased within 2 years before or after

the sale of the old principal residence.    Petitioner did not

purchase a replacement residence within the time allowed by

section 1034(a).

     Petitioner did not file Federal income tax returns for the

tax years 1992 through 1996.   Petitioner had gross income in

excess of $35,000 in each of those years.

                               OPINION

     Petitioner appears to argue that the Government is unjustly

enriching itself by assessing and collecting a tax on the sale of

her house because its sale and her inability to replace it were

the consequences of her ex-husband's actions and his failure to

provide adequate support.   While we sympathize with the

predicament petitioner now finds herself in, the revenue statutes

provide no relief from paying tax on those grounds.

     Petitioner also seems to contend that either the fair market

value or the appraised value at the time of her divorce should be

used as the basis of the house in computing the gain realized.




     1
      (...continued)
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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     There are two components to petitioner's basis in the house.

First, as a coowner she had her share of the purchase price and

cost of improvements.   See sec. 1012.2   Second, when she acquired

her husband's interest in the house incident to the divorce, she

took his adjusted basis in the property pursuant to section

1041(b)(2).3   The total purchase price paid by petitioner and her


     2
      SEC. 1012.   BASIS OF PROPERTY--COST.

          The basis of property shall be the cost of such
     property, except as otherwise provided in this
     subchapter and subchapters C (relating to corporate
     distributions and adjustments), K (relating to partners
     and partnerships), and P (relating to capital gains and
     losses). The cost of real property shall not include
     any amount in respect of real property taxes which are
     treated under section 164(d) as imposed on the
     taxpayer.
     3
      SEC. 1041.   TRANSFERS OF PROPERTY BETWEEN SPOUSES OR
                   INCIDENT TO DIVORCE.

          (a) General Rule.--No gain or loss shall be recognized
     on a transfer of property from an individual to (or in trust
     for the benefit of)--

                (1) a spouse, or

               (2) a former spouse, but only if the transfer is
          incident to the divorce.

          (b) Transfer Treated as Gift; Transferee Has
     Transferor’s Basis.--In the case of any transfer of property
     described in subsection (a)--

               (1) for purposes of this subtitle, the property
          shall be treated as acquired by the transferee by gift,
          and

                (2) the basis of the transferee in the property
                                                    (continued...)
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ex-husband and the cost of improvements are not in dispute, and

it is clear that after the divorce petitioner had acquired all

the cost basis in the property.

     The total cost basis, which was reported on petitioner's

1991 income tax return, is the correct amount to be used to

compute petitioner's gain.   See Godlewski v. Commissioner, 90

T.C. 200 (1988).

     To properly account for the concessions, a recomputation of

petitioner's tax deficiencies will be necessary, and


                                            Decision will be entered

                                       under Rule 155.




     3
      (...continued)
          shall be the adjusted basis of the transferor.

          (c) Incident to Divorce.--For purposes of subsection
     (a)(2), a transfer of property is incident to the divorce if
     such transfer--

               (1) occurs within 1 year after the date on which
          the marriage ceases, or

               (2) is related to the cessation of the marriage.
