Page:United States Statutes at Large Volume 89.djvu/94

 89 STAT. 3 4

PUBLIC LAW 94-12—MAR. 29, 1975 tiates the replacement period under paragraph (2) with respect to the disposition is increased by an amount equal to the amount allowed as a credit for the purchase of such property. " (2) ACQUISITION OF NEW RESIDENCE.—If, in connection w i t h a

Ante, p. 32.

26 USC 1034.

disposition described in paragraph (1) and within the applicable period prescribed in section 1034, the taxpayer purchases or constructs a new principal residence, then the provisions of paragraph (1) shall not apply and the tax imposed by this chapter for the taxable year following the taxable year during which disposition occurs is increased by an amount which bears the same ratio to the amount allowed as a credit for the purchase of the old residence as (A) the adjusted sales price of the old residence (within the meaning of section 1034), reduced (but not below zero) by the taxpayer's cost of purchasing the new residence (within the meaning of such section) bears to (B) the adjusted sales price of the old residence. " (3) D E A T H o r OWNER; CASXIALTY LOSS; INVOLUNTARY CONVER-

26 USC 165. 26 USC 1033.

SION; ETC.—The provisions of paragraph (1) do not apply to— " (A) a disposition of a residence made on account of the death of any individual having a legal or equitable interest therein occurring during the 36 month period to which reference is made under such paragraph, " (B) a disposition of the old residence if it is substantially or completely destroyed by a casualty described in section 165(c)(3) or compulsorily and involuntarily converted (within the meaning of section 1 0 3 3 (a)), or " (C) a disposition pursuant to a settlement in a divorce o r legal separation proceeding where the other spouse retains the residence as principal residence. " (e) PROPERTY TO W H I C H SECTION A P P L I E S. —

" (1) IN GENERAL.—The provisions of this section apply to a new principal residence— " (A) the construction of which began before March 26, 1975, " (B) which is acquired and occupied by the taxpayer after March 12, 1975, and before January 1, 1977, and " (C) if not constructed by the taxpayer, which w a s acquired by the taxpayer under a binding contract entered into by the taxpayer before January 1, 1976. "(2)

SELF-CONSTRUCTED PROPERTY BEGUN BEFORE MARCH

I3,

10 7 5.—In the case of property the construction of which was begun by the taxpayer before March 13, 1975, only that portion of the basis of such property properly allocable to construction after March 12, 1975, shall be taken into account in determining the amount of the credit allowable under subsection (a). " (3) BINDING CONTRACT.—For purposes of this subsection, a contract for the purchase of a residence which is conditioned upon the purchaser's obtaining a loan for the purchase of the residence (including conditions as to the amount or interest rate of such loan) is not considered non-binding on account of that condition. "(4)

CERTIFICATION MUST BE ATTACHED TO RETURN.—This sec-

tion shall not apply to any residence (other than a residence constructed by the taxpayer) unless there is attached to the return of tax on which the credit is claimed a certification by the seller, in accordance with regulations prescribed by the Secretary o r his delegate, that the purchase price is the lowest price at which the residence was ever offered for sale."

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