Epco, Inc. and Subsidiaries - Page 7

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            taxpayer realizes income without actual receipt if such income is                              
            available to the taxpayer and the availability thereof is not                                  
            subject to substantial limitations.  Sec. 1.451-2(a), Income Tax                               
            Regs.  The doctrine of constructive receipt is not applicable in                               
            this case because the escrowed funds were, in fact, disbursed,                                 
            and, as such, provided a direct benefit to petitioner.  The                                    
            remaining cases cited by petitioner involve the issue of                                       
            exchanges under section 1031.3  All of those cases are                                         
                  In addition, petitioner argues that we erred when we stated                              
            that petitioner's reliance on the Staff of Joint Comm. on                                      
            Taxation, General Explanation of the Tax Reform Act of 1986 (J.                                
            Comm. Print 1987), relating to section 118 (the General                                        
            Explanation), is misplaced.  Petitioner argues that because it                                 
            received a sewer line, not cash, the portion of the General                                    
            Explanation concerning valuation is relevant to the determination                              
            of the fair market value of the sewer line, and, as a result, to                               
            the determination of the amount of income petitioner must                                      
            recognize.  The funds in the escrow account were earmarked as                                  
            "tap-on fees" or "contributions in aid of construction".  These                                
            funds went to those entities hired by petitioner to build a                                    
            pipeline that petitioner now owns.  Clearly, petitioner received                               

            3            Carlton v. United States, 385 F.2d 238 (5th Cir. 1967);                           
            Brauer v. Commissioner, 74 T.C. 1134 (1980); Biggs v.                                          
            Commissioner, 69 T.C. 905 (1978), affd. 632 F.2d 1171 (5th Cir.                                

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