United States v. 2020-03-05 | 18-72663 | STEPHEN GAGGERO V. CIR | nonprecedential | memorandum disposition |

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

STEPHEN M. GAGGERO,

Petitioner-Appellant,

v.

COMMISSIONER OF INTERNAL
REVENUE,

Respondent-Appellee.

No. 18-72663

Tax Ct. No. 21378-03

MEMORANDUM
*

Appeal from a Decision of the
United States Tax Court

Submitted March 3, 2020
**

Pasadena, California

Before: HURWITZ and FRIEDLAND, Circuit Judges, and KORMAN,
***
District
Judge.

In 1997, Stephen Gaggero transferred an interest in his residence to a wholly
owned company in return for the installation of certain improvements. The next

*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.

**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).

***
The Honorable Edward R. Korman, United States District Judge for
the Eastern District of New York, sitting by designation.
FILED

MAR 5 2020

MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

2
month, he sold the home to a third party; within two years of that sale, Gaggero
purchased a replacement residence. The Tax Court decided that Gaggero was not
entitled to defer taxation of the gain from the sale of the home on his 1997 individual
return under former I.R.C. § 1034(a)
1
because the “adjusted sales price” of the “old
residence” exceeded the purchase price of the “new residence.” We have jurisdiction
of Gaggero’s appeal under 26 U.S.C. § 7482 and affirm.
In the Tax Court, Gaggero argued there were two separate sales involving the
old residence—one of a partial interest in the residence to the wholly owned
corporation and the other of the remaining interest to the ultimate buyer—and that
the adjusted sales price of the old residence should have reflected only the value of
the remaining interest transferred to the ultimate buyer. Gaggero argues on appeal
that the adjusted sales price should not include his proceeds from the first transaction
for a different reason: the first transaction occurred more than two years before he
purchased his new residence. See I.R.C. § 1034(a) (two-year requirement for
deferral of gain). The Tax Court refused to address this argument because Gaggero
first raised it in a Rule 155 computation statement concerning the amount of the
deficiency. See Tax Ct. R. 155. “A computation under Rule 155 must be made
solely from the evidence in the record and the opinion of the tax court; it cannot be

1
Former I.R.C. § 1034(a) applies here because the sale of Gaggero’s old
residence occurred before May 7, 1997. See Taxpayer Relief Act of 1997, Pub. L.
No. 105-34, § 312(b), (d), 111 Stat. 788, 839, 841.

3
used to reopen the evidence or raise a new issue.” Erhard v. Comm’r, 46 F.3d 1470,
1480 (9th Cir. 1995). The Tax Court did not abuse its discretion by rejecting
Gaggero’s attempt to raise a new issue through a Rule 155 statement and we
therefore decline to address this new argument on appeal.
AFFIRMED.