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purchase of one liquor store and their subsequent sale of another
constituted two independent events, rather than a section 1031
exchange).
Petitioners contend that they never would have sold the
Pacific Grove property except for their need to generate funds to
improve the Big Sur property, and that hence the two transactions
were interdependent. We question the premises and disagree with
the conclusion. While petitioners may have viewed the sale of
the Pacific Grove property as a source of revenue to finance
construction on the Big Sur property, a year prior to the sale of
the Pacific Grove property they were able to borrow against their
personal line of credit to make a cash downpayment on the Big Sur
property. Moreover, they began construction on the Big Sur
property 9 months prior to the Pacific Grove sale. In any event,
neither the petitioners’ financial motivation for selling the
Pacific Grove property nor their application of the sales
proceeds operates to transform the independent purchase and sale
transactions into an exchange. See Anderson v. Commissioner,
T.C. Memo. 1985-205.
Likewise, it is of no material significance that the Elvins
agreed that the money consideration for their purchase of the
Pacific Grove property should be deposited into petitioners’
Provident Central Credit Union account. Indeed, it is difficult
to imagine what difference it could have made to the Elvins.
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