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estate, and, thus, petitioners' exchange was not solely in kind.
Gain must be recognized to the extent of such cash received
(boot). See sec. 1031(b).
The excess proceeds must be taken into account as boot
because the replacement property, 29 Hastings, cost IEC less than
the proceeds available from the disposition of the relinquished
property. By using the excess proceeds to increase their equity
in 29 Hastings (by reducing the mortgage) instead of receiving
the excess proceeds outright, petitioners attempted to avoid
treating the excess proceeds as property not of like kind. That
petitioners, not IEC, agreed to pay down the mortgage on
29 Hastings is indicative of petitioners' control over the excess
proceeds. "'The power to dispose of income is the equivalent of
ownership of it. The exercise of that power to procure the
payment of income to another is the enjoyment, and hence the
realization, of the income by him who exercises it.' * * * [The
taxpayer's] failure to receive cash was entirely due to his own
volition." Murphy v. United States, 992 F.2d 929, 931 (9th Cir.
1993) (quoting Helvering v. Horst, 311 U.S. 112, 118 (1940)).
Petitioners realized gain of over $176,000 and, thus, must
recognize gain on the exchange equal to $36,335.11. Sec.
1031(b).
Unreported Income--Unemployment Compensation
Respondent determined that petitioners failed to report
$4,606 of unemployment compensation that petitioner received
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