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allowing an unlimited number of replacement properties to be
identified, would make the identification requirement
meaningless. The fact that Congress included an identification
requirement suggests that an identification of an unlimited
number of properties could result in none being identified.
In the instant case, however, we need not, and do not,
decide the outer limit of how many replacement properties the
statute permits taxpayers to identify. Petitioner’s effort to
comply with the statute by identifying 20 specific properties to
be received in the exchange appears to have been made in good
faith and does not cause an absurd result, given the fact that
the statute is silent as to the permissible number and the
legislative history is an unreliable indicator of the proper
limitation.4 Petitioner sought advice and, because the
regulations were not published, even in proposed form, at the
3(...continued)
569, 571 (1966).
4
This is not to say, however, that the requirements of sec.
1.1031(k)-1(c)(4), Income Tax Regs., T.D. 8346, 1991-1 C.B. 150,
157, generally limiting to three the number of properties that
taxpayers are entitled to identify, or any number of properties
where their total value does not exceed 200 percent of the fair
market value of the properties relinquished, is not a valid
exercise of the Commissioner’s authority to interpret a statute
which is silent on the matter. As stated above, that regulation
is not before us because it is not effective for the year in
issue.
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