[Congressional Record Volume 142, Number 29 (Wednesday, March 6, 1996)]
[Extensions of Remarks]
[Page E288]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    SPECIAL APPLICATION OF SECTION 1034 OF THE INTERNAL REVENUE CODE

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                           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.

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