PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 839 exchange with, any person who bears a relationship to the taxpayer which is described in section 267(b) or 707(b). "(e) DENIAL OF EXCLUSION FOR EXPATRIATES.—T his section shall not apply to any sale or exchange by an individual if the treatment provided by section 877(a)(1) applies to such individual. "(f) ELECTION TO HAVE SECTION NOT APPLY. —This section shall not apply to any sale or exchange with respect to which the taxpayer elects not to have this section apply. " (g) RESIDENCES ACQUIRED IN ROLLOVERS UNDER SECTION 1034.— For purposes of this section, in the case of property the acquisition of which by the taxpayer resulted under section 1034 (as in effect on the day before the date of the enactment of this section) in the nonrecognition of any part of the gain realized on the sale or exchange of another residence, in determining the period for which the taxpayer has owned and used such property as the taxpayer's principal residence, there shall be included the aggregate periods for which such other residence (and each prior residence taken into account under section 1223(7) in determining the holding period of such property) had been so owned and used.". (b) REPEAL OF NONRECOGNITION OF GAIN ON ROLLOVER OF PRINCIPAL RESIDENCE.—Section 1034 (relating to rollover of gain on sale of principal residence) is hereby repealed. (c) EXCEPTION FROM REPORTING.—Subsection (e) of section 6045 (relating to return required in the case of real estate transactions) is amended by adding at the end the following new paragraph: " (5) EXCEPTION FOR SALES OR EXCHANGES OF CERTAIN PRIN- CIPAL RESIDENCES.— "(A) IN GENERAL. —Paragraph (1) shall not apply to any sale or exchange of a residence for $250,000 or less if the person referred to in paragraph (2) receives written assurance in a form acceptable to the Secretary from the seller that— "(i) such residence is the principal residence (within the meaning of section 121) of the seller, "(ii) if the Secretary requires the inclusion on the return under subsection (a) of information as to whether there is federally subsidized mortgage financing assistance with respect to the mortgage on residences, that there is no such assistance with respect to the mortgage on such residence, and "(iii) the full amount of the gain on such sale or exchange is excludable from gross income under section 121. If such assurance includes an assurance that the seller is married, the preceding sentence shall be applied by substituting '$500,000' for '$250,000 '. The Secretary may by regulation increase the dollar amounts under this subparagraph if the Secretary determines that such an increase will not materially reduce revenues to the Treasury. " (B) SELLER.— For purposes of this paragraph, the term 'seller' includes the person relinquishing the residence in an exchange.". (d) CONFORMING AMENDMENTS.— (1) The following provisions of the Internal Revenue Code of 1986 are each amended by striking "section 1034" and inserting "section 121": sections 25(e)(7), 56(e)(1)(A), 56(e)(3)(B)(i),
�
