                        T.C. Memo. 1997-218



                      UNITED STATES TAX COURT



                  PHILLIP MORENO, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No.   11149-96.                     Filed May 8, 1997.



     Phillip Moreno, pro se.

     Christine V. Olsen, for respondent.



                        MEMORANDUM OPINION


     LARO, Judge:   The case is before the Court fully stipulated

under Rule 122.   Phillip Moreno petitioned the Court to

redetermine respondent's determination of a $24,160 deficiency in

his 1992 Federal income tax.   We must decide whether petitioner's

1992 gross income includes the gain that he realized in 1992 from
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the sale of his personal residence.     We hold it does.   Unless

otherwise indicated, section references are to the Internal

Revenue Code in effect for the relevant year.     Rule references

are to the Tax Court Rules of Practice and Procedure.      Dollar

amounts have been rounded to the nearest dollar.

                             Background

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

These facts and the exhibits submitted therewith are incorporated

herein by this reference.    Petitioner resided in Mission Viejo,

California, when he petitioned the Court.     He filed a 1992 Form

1040, U.S. Individual Income Tax Return, using the filing status

of "Single".    He reported on that return that his 1992 gross

income was $10,009, and that his 1992 taxable income was zero.

     On October 20, 1992, petitioner sold his residence located

at 168 Salisbury Avenue, Goleta, California (Goleta Property),

for $195,000.    He received net proceeds of $85,113 at the

closing, and he realized a $114,449 gain on the sale.      He

reported his gain on a 1992 Form 2119, Sale of Your Home.       This

form stated that petitioner had not yet purchased a replacement

property, but that petitioner intended to do so within the

replacement period.

     On November 2, 1992, petitioner presented his son Rueben

Moreno with a check for $82,113.    Twenty-nine days later, Rueben

Moreno purchased property located at 28 Tamarac Place, Mission

Viejo, California (Tamarac Property), for $157,000. Rueben Moreno
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paid the purchase price by presenting a check in the amount of

$58,400, using $10,000 that he had previously given to an escrow

company as an earnest money deposit and financing the balance

through Long Beach Bank by way of a deed of trust on which he was

solely liable.    Rueben Moreno was listed on the deed as the sole

owner of the Tamarac Property.

       On July 14, 1994, Rueben Moreno transferred the Tamarac

Property to himself and his wife Teresa Moreno as joint tenants.

Four months later, Rueben and Teresa Moreno transferred the

Tamarac Property to themselves and petitioner as joint tenants.

On November 8, 1995, petitioner reconveyed his interest in the

Tamarac Property to Rueben and Teresa Moreno as joint tenants.

       Petitioner and Rueben and Teresa Moreno resided at the

Tamarac Property during all relevant times.    Petitioner did not

deduct the mortgage interest paid on the Tamarac Property on his

1993, 1994, or 1995 Federal income tax return.    Rueben Moreno

did.

       Respondent determined that petitioner failed to replace the

Goleta Property within the replacement period, and that,

accordingly, petitioner's 1992 gross income included his $114,449

gain on the property's sale.    Petitioner petitioned the Court on

June 3, 1996, to redetermine respondent's determination.

Petitioner alleged in his petition that he met the requirements

under section 1034 which would defer his gain.    Petitioner

further alleged that Rueben Moreno's name was used on the
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documents surrounding the purchase of the Tamarac Property

because petitioner was "on disability" and unable to secure a

mortgage in his own name.   Petitioner further alleged that

Rueben Moreno used petitioner's money as the downpayment on the

Tamarac Property, and that he and Rueben Moreno intended for

petitioner to own the Tamarac Property.

     The Court served petitioner on September 20, 1996, with a

notice setting this case for trial at the trial session beginning

on February 24, 1997, in San Diego, California.    On February 24,

1997, petitioner's case was called for trial.   Petitioner failed

to appear either in person or by representative.   Respondent's

counsel appeared and submitted this case to the Court fully

stipulated.   At this time she informed the Court that a

representative of petitioner had notified her that petitioner

wanted to submit his case to the Court under Rule 122.

     By Order dated February 24, 1997, we directed the parties to

file with the Court on or before March 26, 1997, memoranda of

points and authorities.   Respondent filed her memorandum of

authorities with the Court on March 7, 1997.    Petitioner did not

filed a memorandum of points and authorities with the Court.

                            Discussion

     Section 1034(a) allows an individual to defer the

recognition of all or part of any gain realized on the sale of a

principal residence if other property is purchased and used by

the taxpayer as a new principal residence within the period
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beginning 2 years before the date of the sale and ending 2 years

after that date.   Section 1034(a) provides that gain is

recognized only to the extent that the individual's adjusted sale

price of the old residence exceeds his or her cost of purchasing

the new residence.

     Petitioner did not replace the Goleta Property within the

4-year statutory period.   Although petitioner alleges that he did

because Rueben Moreno bought the Tamarac Property on petitioner's

behalf, we are not persuaded that such was the case.   The name of

Rueben Moreno appeared on all of the documents surrounding the

closing of the Tamarac Property, Rueben Moreno was the only

person liable on the underlying debt, and Rueben Moreno was the

only person listed on the original deed.   It is also relevant

that petitioner declared on his 1992 tax return that he had not

yet purchased a property to replace the Goleta Property, and that

Rueben Moreno had purchased the Tamarac Property before

petitioner's 1992 return was filed.    The record does not support

petitioner's allegation that he was "on disability" at the time

that Rueben Moreno purchased the Tamarac Property.   In any event

the fact remains that it was Rueben Moreno who made the purchase.

     Even if we were to find that Rueben Moreno purchased the

Tamarac Property for petitioner's benefit, which we do not,

petitioner would still be outside the scope of section 1034.

Section 1034 is strictly construed, see, e.g., Boesel v.

Commissioner, 65 T.C. 378, 390 (1975); Lokan v. Commissioner,
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T.C. Memo. 1979-380; Bazzell v. Commissioner, T.C. Memo.

1967-101, and the key to nonrecognition afforded therein turns on

maintaining continuity of title, Starker v. United States,

602 F.2d 1341, 1351 (9th Cir. 1979); Allied Marine Sys., Inc. v.

Commissioner, T.C. Memo. 1997-101; see also Edmondson v.

Commissioner, T.C. Memo. 1996-393.     When an individual disposes

of his or her residence, the new residence must be placed in the

taxpayer's name to defer gain under section 1034.     Marcello   v.

Commissioner, 380 F.2d 499, 502 (5th Cir. 1967), affg. on this

issue and remanding on other issues T.C. Memo. 1964-299 (gain

recognized where title to the new residence was placed in the

name of the taxpayer's mother); Snowa v. Commissioner, T.C. Memo.

1995-336 (gain recognized where the divorced taxpayer purchased a

new residence where the title to the new residence was jointly

placed in the names of the taxpayer and her new spouse and the

taxpayer's cost of purchasing her interest in the new residence

exceeded the adjusted sale price for her interest in the old

residence); May v. Commissioner, T.C. Memo. 1974-54 (gain

recognized where title to the new residence was placed in the

name of the taxpayer's daughter); see also De Ocampo v.

Commissioner, T.C. Memo. 1997-161; sec. 1.1034-1(b)(9), Income

Tax Regs.   If there is a shift in title from the taxpayer to

someone other than the taxpayer, nonrecognition under section

1034 is usually denied.   Marcello v.    Commissioner, supra.
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     We hold for respondent.   In so doing, we have considered all

allegations of petitioner and, to the extent not discussed above,

find them to be irrelevant or without merit.

     To reflect the foregoing,

                                              Decision will be entered

                                         for respondent.
