Michael Hillyer and Teresa Hillyer, et al. - Page 11

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               means that multiple parties must be involved in the                    
               transaction.  * * *                                                    
               As a result, courts have acknowledged that transactions that           
          take the form of a cash sale and reinvestment cannot, in                    
          substance, constitute an exchange for purposes of section 1031,             
          even though the end result is the same as a reciprocal exchange             
          of properties.  Bell Lines, Inc. v. United States, 480 F.2d 710,            
          714 (4th Cir. 1973); Carlton v. United States, 385 F.2d 238, 241            
          (5th Cir. 1967).  Thus, our inquiry is narrowly focused on                  
          whether the corporation's disposition of the Phoenix property in            
          this case was a sale, as argued by respondent, or an exchange for           
          the Coggeshall and Inness properties, as argued by petitioners.             
               Petitioners contend that the series of transactions here               
          culminating in the acquisition of the Coggeshall property and the           
          Inness property with funds resulting from the Phoenix property              
          transfer, were steps in an integrated transaction, the substance            
          of which was an exchange of properties within section 1031(a).              
               In some multiparty transactions, the taxpayer desires to               
          exchange, rather than to sell, his property, but the potential              
          buyer owns no property that the taxpayer wishes to receive in               
          exchange.  Thus, some cases involve three or more parties and               
          multiple conveyances of property in an effort to structure an               
          exchange instead of a sale and reinvestment.  In some of them,              
          these multiparty transactions have been held to constitute an               
          exchange within the meaning of section 1031.  In so holding, the            
          courts have allowed taxpayers great latitude in structuring their           



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