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Specific Comments on the Proposed
Section 121 Regulations
(Reg-105235-99; October 10, 2000)
May 1, 2001
V. Definition of a Principal Residence
Comments
- Allow for Application of Section 121(d)(3)(B) Prior to Existence of a Written Instrument
Often in the case of divorce, one spouse may move out of the residence for
an extended period while the parties try to work things out. In such situations, there is
often a clear understanding between the parties that one of the spouses and any children
will continue to stay in the house, but there is no written instrument.
Recommendation: Reg. §1.121-4(b)(2) should be expanded to allow
for a divorce or separation instrument to give the right to use the residence to the
“in-spouse” retroactively.
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