- 12 -
its purpose. Filippini v. United States, 318 F.2d 841, 844 (9th
Cir. 1963); John Richard Corp. v. Commissioner, supra at 44.
Respondent concedes that (1) petitioners have made the
election, (2) petitioners purchased property similar or related
in service or use to the property converted within the statutory
time limit, and (3) the cost of the replacement property equaled
or exceeded the amount realized on the conversion. The only
issue is whether Lancaster made a "threat of condemnation"
regarding the 23d Street property.
A "threat of condemnation" exists if (1) the body
threatening condemnation possesses the power of eminent domain,
(2) the property owner is told by an official of the threatening
body that condemnation will be sought unless the owner negotiates
a sale or exchange of the property, and (3) the information
conveyed to the owner gives the owner reasonable grounds to
believe that the threat was authorized and likely to be carried
out unless a sale or exchange is arranged. Tecumseh Corrugated
Box Co. v. Commissioner, 94 T.C. 360, 376-377 (1990), affd. 932
F.2d 526 (6th Cir. 1991); Maixner v. Commissioner, 33 T.C. 191,
195 (1959); Dominguez Estate Co. v. Commissioner, T.C. Memo.
1963-112; Carson Estate Co. v. Commissioner, T.C. Memo. 1963-90.
The existence of a threat of condemnation is judged from the
seller's perspective taking into account all facts known at the
time of sale. Tecumseh Corrugated Box Co. v. Commissioner,
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011