14
* * * The taxpayer is in actual receipt of money
or property at the time the taxpayer actually receives
the money or property or receives the economic benefit
of the money or property. * * *
Finally, in section 1.1031(k)-1(g)(3), Income Tax Regs., the
new regulations provide that in the case of an exchange in a
deferred plan, the exchange will be recognized under section
1031(a) without regard to the receipt of cash if the cash is held
in a qualified escrow account, which is defined as one where (a)
the escrow holder is not the taxpayer or a disqualified person,
and (b) the escrow agreement expressly limits the taxpayer's
rights to receive the cash held in the escrow account.
With these new statutory and regulatory requirements in
mind, and recalling that the transfer of the Phoenix property by
the corporation took place in August 1991, and the Coggeshall and
Inness properties were acquired by it on January 30, 1992, we
address the situation in these cases.
The facts show that the designation by the corporation of
the intended replacement properties took place on September 20,
1991, which was within the 45 days required under the language of
section 1031(a)(3)(A). Both the Coggeshall and Inness properties
were received by the corporation on January 30, 1992, within 180
days after the date of the disposition of the Phoenix properties
to Penn-Daniels on August 9, 1991, as required by section
1031(a)(3)(B). Only three replacement properties were
designated.
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