Donald DeCleene and Doris DeCleene - Page 18

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          77(b), 98 Stat. 596.  These regulations, with their provisions              
          for use of third-party “qualified intermediaries” as                        
          accommodation titleholders, who will not be considered the                  
          taxpayer’s agent in doing the multiparty deferred exchanges                 
          permitted by the regulations, have encouraged the growth of a new           
          industry of third-party exchange facilitators.                              
               The subject transactions present a case of first impression            
          in this Court.  They reflect the effort of petitioner and his               
          advisers to implement a so-called reverse exchange directly with            
          WLC, without the participation of a third-party exchange                    
          facilitator.  Reverse exchanges have been described as                      
          transactions in which the taxpayer locates and identifies the               
          replacement property (and acquires it or causes it to be acquired           
          on his behalf by an exchange facilitator) before he is ready to             
          transfer the property to be relinquished in exchange.  The                  
          preamble to the deferred exchange regulations, sec. 1.1031(k)-1,            
          Income Tax Regs., made clear the Commissioner’s view that section           
          1031(a)(3) and the deferred-exchange regulations do not apply to            
          reverse exchanges.  See T.D. 8346, 1991-1 C.B. 150, 151.                    
               The Commissioner has recently responded to industry and                
          practitioner requests for guidance5 by publishing a revenue                 

          5 See, e.g., American Bar Association Section on Taxation,                  
          Committee on Sales, Exchanges and Basis, Report on the                      

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