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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
inapposite.
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.
1980).
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