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Sec. 1033, INVOLUNTARY CONVERSIONS1033(a) General Rule. —If property (as a result of its destruction inwhole or in part, theft, seizure, or requisition or condemnation orthreat or imminence thereof) is compulsorily or involuntarilyconverted —1033(a)(1) Conversion into similar property. —Into property similar orrelated in service or use to the property so converted, no gain shallbe recognized.§1.1033(a)-2., Involuntary conversion into similar property, intomoney or into dissimilar propertyInvoluntary conversion into similar property, into money or intodissimilar property(a) In general. —The term “disposition of the converted property”means the destruction, theft, seizure, requisition, or condemnation ofthe converted property, or the sale or exchange of such propertyunder threat or imminence of requisition or condemnation.(b) Conversion into similar property. —If property (as a result of itsdestruction in whole or in part, theft, seizure, or requisition orcondemnation or threat or imminence thereof) is compulsorily orinvoluntarily converted only into property similar or related in serviceor use to the property so converted, no gain shall be recognized.Such nonrecognition of gain is mandatory.
9-74Chapter 9: Acquisitions of Property83.RIA RESEARCH EXERCISEUse the RIA Checkpoint database to answer thefollowing questions. Cut and paste the relevant Internal Revenue Code andTreasury Regulation section(s) into your solution and explain how the authorityanswers the tax issue in question. Give the most specific citation applicable[e.g., Sec. 168(a)(1)] that answers the question. Note: If the answer can befound in both the code and regulations, you must provide both authorities.1.Jerry and Jane are married on March 18, 2006. They use Jane’s house as theirresidence and sell Jerry’s house on April 27, 2006 for $420,000. Jerry hadpurchased the house in 1999 for $120,000.a.What code section and/or regulation allows the exclusion of gain from thesale of a taxpayer’s residence?
Chapter 9: Acquisitions of Property9-75121(b) Limitations. —121(b)(1) In general. —The amount of gain excluded from grossincome under subsection (a) with respect to any sale orexchange shall not exceed $250,000.121(b)(2) Special rules for joint returns. —In the case of a