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addition to the methods set forth therein, the exchange of
petitioner’s interest in RPDS for like-kind property may be
effected in any other manner mutually satisfactory to the parties
thereto.
Respondent concedes that it was not necessary for the Labbes
to take title to Hillview in order for the exchange of
petitioner’s interest in RPDS for such property to meet the
requirements of section 1031(a). See Biggs v. Commissioner, 632
F.2d at 1177. Consequently, we do not consider it significant,
for purposes of section 1031(a), that the parties to the
amendment did not follow the procedure for acquiring the
replacement property (i.e., Hillview). Moreover, by their
conduct, we treat petitioner and the Labbes as having adopted,
pursuant to the provisions of the amendment, a mutually
satisfactory alternative method for accomplishing the exchange of
petitioner’s interest in RPDS for Hillview.
We next consider respondent’s argument concerning the
provisions of section 1031(a)(3). As noted above, respondent
argues that petitioner’s identification of replacement properties
did not satisfy section 1031(a)(3)(A) because (1) petitioner
identified 20 properties as replacement properties, and (2) the
particular replacement properties to be received were not to be
determined by contingencies beyond the control of the parties to
the exchange. Respondent relies on the following passage in the
conference report on DEFRA:
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