115 T.C. No. 34
UNITED STATES TAX COURT
DONALD DECLEENE AND DORIS DECLEENE, Petitioners
v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24459-97. Filed November 17, 2000.
P had operated his business on the M Street
property since 1977. In 1992, P purchased the
unimproved L Drive property as replacement property.
In September 1993, P and WLC, who wished to acquire M
Street, agreed that M Street and unimproved L Drive
were of equal value, $142,400; P quitclaimed title to L
Drive to WLC for a deferred cash consideration of
$142,400, to be paid at a second closing; WLC agreed to
build a building on L Drive to P’s specifications and
in December 1993 to reconvey L Drive to P, with the
substantially completed building on it, in exchange for
M Street. These transactions closed as agreed. While
WLC held title to L Drive, P retained beneficial
ownership thereof and was responsible for all
transaction costs and carrying charges. Construction
was financed by a note and mortgage guaranteed by P
that were nonrecourse as to WLC, and P assumed personal
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