Mink Bill Would Allow Special Relief From Gain Rollover Provision.
H1775, E288
- AuthorsMink, Rep. Patsy T.
- Institutional AuthorsU.S. House of Representatives
- Code Sections
- Subject Area/Tax Topics
- Index Termssale of residence, rollover of gain
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 96-6995 (2 pages)
- Tax Analysts Electronic Citation96 TNT 55-55
H.R. 3035
Rep. Patsy T. Mink, D-Hawaii, has introduced H.R. 3035, which would provide for a special extension of the sale of residence, rollover of gain limit.
Mink pointed out that Hurricane Iniki caused extensive destruction, both of property and documents. She cited the example of one of her constituents, Rita Bennington, who bought a new house, but was unable to sell her current home in time to benefit from gain rollover provision under section 1034. Mink's bill would extend the time limit to 2.5 years, allowing her constituent to rollover the gain. "Individuals who suffer as a direct result of [a natural disaster] should not be additionally penalized with the denial of an expected tax deduction," Mink said.
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SPECIAL APPLICATION OF SECTION 1034 OF THE INTERNAL REVENUE CODE
HON. PATSY T. MINK
OF HAWAII
IN THE HOUSE OF REPRESENTATIVES
Wednesday, March 6, 1996
Mrs. MINK of Hawaii. Mr. Speaker, today I introduced a bill to provide for a special application of section 1034 of the Internal Revenue Code of 1986.
According to section 1034 of the Internal Revenue Code: If a property used by the taxpayer as his principal residence is sold by him and, within a period beginning 2 years before the date of such sale and ending 2 years after such date, property is purchased and used by the taxpayer as his principal residence, gain from such sale 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.
When Hurricane Iniki hit on September 11, 1992, the island of Kauai was totally devastated. Thousands lost their homes along with all of their possessions. The hurricane destroyed documents and caused numerous other problems. The crisis left the County of Kauai unable to process claims already in progress in the usual timely fashion. As a result, the 24 month IRS rollover period permitting nonrecognition of gain, on Ms. Rita Bennington's sale of her old principal residence, expired. The delays caused by the disaster are well documented, however the IRS code has no leniency for such unforeseen circumstances.
My constituent, Ms. Rita Bennington, purchased her new residence within the meaning of section 1034, however was unable to meet its requirements with respect to the sale of her old principal residence, due to the delays caused by Hurricane Iniki. This bill would allow her 2.5 years, instead of 2 years, to complete the transaction thereby allowing her to apply nonrecognition of gain provisions to the sale of her old principal residence.
Natural disasters are truly unfortunate. Nevertheless, individuals who suffer as a direct result of such destruction should not be additionally penalized with the denial of an expected tax deduction. Such circumstances should be given legislative relief.
Mr. Speaker, I urge the immediate consideration of this legislation.
- AuthorsMink, Rep. Patsy T.
- Institutional AuthorsU.S. House of Representatives
- Code Sections
- Subject Area/Tax Topics
- Index Termssale of residence, rollover of gain
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 96-6995 (2 pages)
- Tax Analysts Electronic Citation96 TNT 55-55