- 2 -
otherwise indicated, all section references are to the Internal
Revenue Code as in effect for the year in issue, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
FINDINGS OF FACT
At the time the petition in the instant case was filed,
petitioner resided in Lewiston, Maine.
During 1988, petitioner and his ex-wife, Phyllis St.
Laurent, owned, as tenants in common, an apartment complex known
as RPDS Estates (RPDS) located in Auburn, Maine. Petitioner
decided to sell RPDS and acquire other real property in which Ms.
St. Laurent would not have an interest. Petitioner intended to
dispose of his interest in RPDS by exchanging it for other
property in a manner that would entitle him to nonrecognition
treatment of the gain realized pursuant to section 1031(a).
On May 9, 1988, petitioner and Ms. St. Laurent agreed to
sell RPDS to Richard and Barbara Labbe for $1,900,000. The
purchase and sale agreement (sale agreement) signed by them
provided that “It is agreed between the parties that Purchasers
shall assist Seller in consummating a Section 1031 Tax Deferred
Exchange. Seller shall indemnify Purchaser of any legal or
accounting costs of said exchange.”
After the sale agreement was signed, petitioner began
looking for property to replace his interest in RPDS, but he had
not selected replacement property by the time the sale of RPDS
closed. The closing was delayed pending regulatory approval of
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011