- 19 - Respondent makes much of the fact that (1) Mr. Johnson reminded Lancaster city officials to include in written documents the fact that Lancaster was acquiring the 23d Street property under threat of condemnation, and (2) Mr. Johnson was concerned about the tax implications of a move to the Lancaster Auto Mall. Contrary to respondent's contentions, the fact that petitioner may have had tax concerns regarding his sale of the 23d Street property to Lancaster while under threat of condemnation does not lead us to conclude that the deal struck between Lancaster and Mr. Johnson was structured or collusive. See Balistrieri v. Commissioner, T.C. Memo. 1979-115. We conclude that petitioners had reasonable grounds to believe, and did believe, that Lancaster authorized the threats of condemnation and was likely to carry them out unless a sale or exchange was arranged. 4. Conclusion The witnesses consistently and credibly testified that Lancaster city officials threatened Mr. Johnson with condemnation of the 23d Street property and that Mr. Johnson believed, and had reason to believe, these threats. Based on the record, we conclude that a "threat of condemnation" existed, and petitioners sold the 23d Street property because of repeated threats of condemnation from a number of Lancaster city officials.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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