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petitioners knew and understood the need to timely identify
replacement property, it is highly improbable that petitioners
would have kept any actual interest in these properties to
themselves. Under these circumstances, we find to be untrue
petitioners' testimony that their decisions to acquire Pleasant
Hill and Skyland as replacement property were made during the
identification period. As further evidence of the incredible
nature of his testimony, petitioner husband repeatedly testified
that he was not familiar with the 45-day identification
requirement. Yet, Mr. Clack and several real estate agents
testified that they regularly discussed the requirement with
petitioners and that petitioner husband appeared to understand
it.
We find that petitioners did not take any steps to identify
Pleasant Hill or Skyland as replacement property during the
identification period. Moreover, if taxpayers were permitted to
identify replacement property between themselves without
notifying an unrelated party or another party to the exchange,
the identification requirement would be meaningless. Designation
between married taxpayers would also create problems with the
limitation on the number of properties permitted to be identified
and would essentially be the equivalent of permitting taxpayers
to identify an unlimited number of replacement properties. See
St. Laurent v. Commissioner, T.C. Memo. 1996-150. We conclude
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