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properties pursuant to section 1031(a). Generally, a taxpayer
must recognize gain or loss on the sale of real property. Sec.
1001(c). However, section 1031(a) provides for the deferral of
gain or loss when there is an exchange of like-kind business or
investment properties, as distinguished from a cash sale of
property by the taxpayer and a reinvestment of the proceeds in
other property. Barker v. Commissioner, 74 T.C. 555, 561 (1980).
Petitioner contends that his sale of the Monroe Road and
Seventh Street properties and subsequent purchase of the East
Boulevard property qualifies as a nontaxable exchange under
section 1031(a). Respondent contends that those transactions do
not qualify because (1) petitioner did not identify the
replacement property within 45 days of the sale of the
relinquished properties; (2) petitioner received the proceeds
from the sale of the relinquished properties; and (3) the sales
and purchase were not an "exchange" as required by section
1031(a). Respondent's determinations are presumed correct, and
petitioner bears the burden of proof. Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933). Petitioner must rebut all
three of respondent's arguments to qualify under section 1031(a).
B. Identification Requirement
Section 1031(a)(3)(A) requires replacement property to be
identified within 45 days after the date the taxpayer transfers
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Last modified: May 25, 2011