San Diego Law Review


Mary Tseng

Library of Congress Authority File


Document Type



This Comment examines the recent development of tax strategies by which a homeowner, desiring to sell his old principal residence but unable to do so because of a buyer's market, can over-come the two-year limitation period of Internal Revenue Code section 1034, by requiring the formation of a legitimate corporation to act as the buyer and the transfer of the homeowner's old principal residence to the newly formed corporation to be recognized as a sale. The author argues that the newly formed corporation is likely to be disregarded and, in the event that it is not disregarded, the transfer is likely to be characterized as a section 351 transfer of a capital contribution, not a sale. As a result, the author concludes that, under both the current tax law and the proposed Tax Reform Act of 1986, such a strategy will not prove to be a viable means of overcoming section 1034's two-year limitation period.

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