- 9 -
to the transaction have acted consistently therewith. Garcia v.
Commissioner, supra at 498.
In the instant case, respondent makes two principal
arguments that the RPDS/Hillview exchange transaction fails to
qualify for tax-deferred treatment pursuant to section 1031(a).
Respondent’s first objection is that, in acquiring Hillview
himself, petitioner failed to observe the terms of the amendment
to the sale agreement that provided that the Labbes would
purchase the property to be exchanged for his interest in RPDS.
Secondly, respondent contends that petitioner’s identification of
20 replacement properties exceeds the limitation on the number of
replacement properties that may be designated pursuant to section
1031(a)(3), and that the particular replacement property received
in the exchange was not subject to determination by contingencies
beyond the control of the parties to the exchange.
As to respondent’s first contention, the amendment to the
sale agreement makes clear that the manner in which the exchange
transaction was to be effected was almost exclusively within
petitioner’s control. We view the Labbes’ undertakings in the
amendment with respect to the acquisition of property to be
exchanged for petitioner’s interest in RPDS as merely
accommodations to petitioner to ensure that the Labbes would
perform whatever acts that might be deemed necessary to cause an
exchange to qualify for like-kind exchange treatment pursuant to
section 1031(a). Moreover, the amendment provides that, in
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