- 13 - subject properties was foreseeable as of the valuation date8, see Ithaca Trust Co. v. United States, 279 U.S. 151 (1929)(subsequent events are not considered in determining fair market value, except to the extent that they were reasonably foreseeable at the date of valuation); Estate of Scanlan v. Commissioner, supra, and consequently there was the requisite likelihood that the corporations would sell the properties, the estate has failed to show that it was likely that either of the corporations would pay built-in capital gains tax upon sale. As a general rule, gain realized from the sale or other disposition of property must be recognized. See sec. 1001(c). Section 1033 provides an exception to this general rule by allowing gain realized from certain involuntary conversions to be deferred. Realized gain can be deferred in its entirety under section 1033 if: (1) nonrecognition treatment is elected; (2) qualified replacement property is purchased within the time limits specified; and (3) the cost of the qualified replacement property equals or exceeds the amount realized on the conversion. Sec. 1033(a)(2)(A). Among other things, an involuntary 8 The only evidence submitted which tends to show that the estate was aware of potential condemnation of the real property on the valuation date, and not thereafter, is a magazine article entitled Nashville Neighborhoods Downtown Turning Renderings into Reality, published in the Aug. 1992 issue of Nashville Business and Lifestyles. The article discusses revitalization of the downtown Nashville area, and the proposal appears to encompass properties owned by ESI and ISC.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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