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agreement. The agreed purchase price was $500,000, consisting of
$390,000 to be paid from the escrow account and a $110,000
seller-financed mortgage. By letter dated March 20, 1989,
petitioner requested the escrow agent to release the funds in the
escrow account to the law firm handling the closing for Hillview.
On March 22, 1989, petitioner closed on Hillview. The Labbes did
not participate in, nor were they present at, the closing.
Petitioner and Ms. St. Laurent timely filed a joint Federal
income tax return for 1988 on April 15, 1989. They did not
request an extension of time to file such return.
On May 17, 1989, petitioner closed on the Sheffield lot.
OPINION
Section 1001 generally requires recognition of the entire
amount of gain or loss on the sale or exchange of property.
Section 1031(a)(1), however, provides for the nonrecognition of
such gain or loss on “the exchange of property held for
productive use in a trade or business or for investment if such
property is exchanged solely for property of like kind which is
to be held either for productive use in a trade or business or
for investment.” For transfers after July 18, 1984, section
1031(a)(3), enacted as part of the Deficit Reduction Act of 1984
(DEFRA), Pub. L. 98-369, sec. 77(a), 98 Stat. 494, 595, governs
deferred like-kind exchanges. Section 1031(a)(3) provides:
(3) Requirement that property be identified and
that exchange be completed not more than 180 days after
transfer of exchanged property.--For purposes of this
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