Terry D. Smith - Page 5

                                        - 5 -                                         
          high debt-to-value ratio.  In order to buy the property,                    
          petitioner wanted to obtain some seller financing.  Fourth,                 
          petitioner could not decide if the property was acceptable                  
          without the approval of Frederick R. Black (Black), his new                 
          partner.  Black saw the East Boulevard property in early March              
          1990.  Petitioner did not look at any properties after February             
          27, 1990; he was extremely busy because of the tax season.                  
             Smith intended to talk to petitioner on March 26 about making            
          an offer on the East Boulevard property, but it is unknown                  
          whether he did so.  Petitioner and Black did not make an offer to           
          buy the property until May 14, 1990.                                        
             On May 25, 1990, petitioner and Black, as SB Properties, a               
          North Carolina general partnership, contracted with Harold H. and           
          Loretta K. Brown (Mr. and Mrs. Brown) to buy the East Boulevard             
          property.  Paragraph (2) of Addendum "A" of the Offer to Purchase           
          and Contract states as follows:                                             
             Exchange Provision.  Buyer may wish to qualify this                      
             transaction under Section 1031 of the Internal Revenue                   
             Code; therefore, Buyer shall have the right to cause                     
             Seller to accept suitable property in exchange for all or                
             part of Seller's property hereunder; provided that,                      
             property exchanged to Seller shall be subject to immediate               
             purchase by a third party, and provided further that the                 
             cost to Seller of accepting the exchange property and                    
             transferring it to a third party shall be reimbursed to                  
             Seller by Buyer, and provided that the terms and                         
             conditions of such exchange shall in no event be more                    
             onerous and burdensome to Seller.                                        
             On June 19, 1990, Mr. and Mrs. Brown transferred the East                
          Boulevard property to petitioner and Black as tenants in common.            





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  Next

Last modified: May 25, 2011