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TITLE 26-INTERNAL REVENUE CODE to deduction for amounts representing taxes and interest paid to a cooperative housing cor- poration) in a cooperative housing corporation (as defined in such section) if- (1) in the case of stock sold, the house or apartment which the taxpayer was entitled to occupy as such stockholder was used by him as his principal residence, and (2) in the case of stock purchased, the tax- payer used as his principal residence the house or apartment which he was entitled to occupy as such stockholder. (g) Husband and wife If the taxpayer and his spouse, in accordance with regulations which shall be prescribed by the Secretary pursuant to this subsection, con- sent to the application of paragraph (2) of this subsection, then- (1) for purposes of this section- (A) the taxpayer's adjusted sales price of the old residence is the adjusted sales price (of the taxpayer, or of the taxpayer and his spouse) of the old residence, and (B) the taxpayer's cost of purchasing the new residence is the cost (to the taxpayer, his spouse, or both) of purchasing the new residence (whether held by the taxpayer, his spouse, or the taxpayer and his spouse); and (2) so much of the gain on the sale of the old residence as is not recognized solely by reason of this subsection, and so much of the adjustment under subsection (e) to the basis of the new residence as results solely from this subsection shall be allocated between the taxpayer and his spouse as provided in such regulations. This subsection shall apply only if the old resi- dence and the new residence are each used by the taxpayer and his spouse as their principal residence. In case the taxpayer and his spouse do not consent to the application of paragraph (2) of this subsection then the recognition of gain on the sale of the old residence shall be de- termined under this section without regard to the rules provided in this subsection. (h) Members of Armed Forces The running of any period of time specified in subsection (a) or (c) (other than the 18 months referred to in subsection (c)(4)) shall be suspended during any time that the taxpayer (or his spouse if the old residence and the new residence are each used by the taxpayer and his spouse as their principal residence) serves on extended active duty with the Armed Forces of the United States after the date of the sale of the old residence except that any such period of time as so suspended shall not extend beyond the date 4 years after the date of the sale of the old residence. For purposes of this subsection, the term "extended active duty" means any period of active duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period. () 1 Special rule for condemnation In the case of the seizure, requisition, or con- demnation of a residence, or the sale or ex- change of a residence under threat or immi- nence thereof, the provisions of this section, in 'So in original. Probably should be "(i)". lieu of section 1033 (relating to involuntary conversions), shall be applicable if the taxpayer so elects. If such election is made, such seizure, requisition, or condemnation shall be treated as the sale of the residence. Such election shall be made at such time and in such manner as the Secretary shall prescribe by regulations. (j) Statute of limitations If the taxpayer during a taxable year sells at a gain property used by him as his principal residence, then- (1) the statutory period for the assessment of any deficiency attributable to any part of such gain shall not expire before the expira- tion of 3 years from the date the Secretary is notified by the taxpayer (in such manner as the Secretary may by regulations prescribe) of- (A) the taxpayer's cost of purchasing the new residence which the taxpayer claims re- sults in nonrecognition of any part of such gain, (B) the taxpayer's intention not to pur- chase a new residence within the period specified in subsection (a), or (C) a failure to make such purchase within such period; and (2) such deficiency may be assessed before the expiration of such 3-year period notwith- standing the provisions of any other law or rule of law which would otherwise prevent such assessment. (k) Cross reference For exclusion from gross income of certain gain from sale or exchange of residence of taxpayer who has at- tained age 65, see section 121. (Aug. 16, 1954, ch. 736, 68A Stat. 306; Sept. 2, 1958, Pub. L. 85-866, title I, § 46(b), 12 Stat. 1642; Feb. 26, 1964, Pub. L. 88-272, title II, § 206(b)(4), 78 Stat. 40; Jan. 2, 1975, Pub. L. 93- 597, § 6(a), 88 Stat. 1953; Mar. 29, 1975, Pub. L. 94-12, title II, § 207, 89 Stat. 32; Oct. 4, 1976, Pub. L. 94-455, title XIX, §§1901(a)(129), 1906(b)(13)(A), 90 Stat. 1785, 1786, 1834.) REFERENczs IN TEXT Section 112 of the Internal Revenue Code of 1939, referred to in subsec. (e), was classified to section 112 of former Title 26, Internal Revenue Code. Section 112 was repealed by section 7851(a)(1) of this title. For table of comparisons of the 1939 Code to the 1954 Code, see Table I preceding section 1 of this title. See, also, section 7851(e) of this title, for provisiops that references in the 1954 Code to provision of the 1939 Code, not then applicable, shall be deemed a reference to the corresponding provision of the 1954 Code, which is then applicable. AMENDMENTS 1976-Subsrc. (a). Pub. L. 94-455, § 1901(a)(129)(A) struck out "after December 31, 1953," following "his principal residence is sold by him". Subsec. (b)(3). Pub. L. 94-455, § 1901(a)(129)(B), struck out subsec. (b)(3) which related to the effective date of subsec. (b). Subsec. d). Pub. L. 94-455, § 1901(a)(129)(C), struck out "or section 112(n) of the Internal Revenue Code of 1939" following "by reason of subsection (a)". Subsec. (g). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subset. (i). Pub. L. 94-455, 1901(a)(129)(D), among other changes, substituted in par. catchline "Special rule for condemnation" for "Special rule for involun- tary conversions" and in text, a uniform provision for § 1034 Page 650