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We cannot determine from the record whether petitioner was
in a better or worse position at the time of reacquisition than
he was at the time of the original sale. Upon the reacquisition,
petitioner had the property, plus $719,480 in cash he had
received at the time of sale, and $296,228 in interest payments.
The parties have stipulated that the fair market value of the
225-235 Boston Avenue property was $465,000 at the time of
reacquisition. Under the terms of the mortgage note, petitioner
had no further recourse against the partnership or its general
partners upon reacquisition of the property. Despite his
subsequent expressions of discontent with the terms of the
transaction, petitioner willingly sold the property on those
terms in 1988 and received $719,480 at the closing and interest
payments pursuant to the mortgage note in 1988 and 1989. Only
when petitioner resells the property will he be able to ascertain
whether the changes by the partnership and the then-current
market conditions will result in a loss. Congress enacted
section 1038 to provide mandatory, uniform income tax treatment
in precisely this kind of case, deferring recognition of either
gain or loss until the seller once again sells the reacquired
property and the amount of the gain or loss can be objectively
measured. S. Rept. 1361, supra, 1964-2 C.B. at 831; see also
Greene v. Commissioner, 76 T.C. at 1025-1026.
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