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procedure describing the Commissioner’s conditions for qualifying
reverse exchanges for nonrecognition of gain under section
1031(a)(1). See Rev. Proc. 2000-37, 2000-40 I.R.B. 308. Like
the deferred exchange regulations that implement section
1031(a)(3), the revenue procedure provides for third-party
qualified intermediaries as exchange accommodation titleholders
in carrying out the “qualified exchange accommodation
arrangements” whose use will qualify reverse exchanges for
nonrecognition of gain or loss under section 1031(a)(1). Like
the deferred exchange regulations, the revenue procedure provides
a safe harbor; it states that “the Service recognizes that
‘parking’ transactions can be accomplished outside of the safe
harbor provided this revenue procedure”, but that “no inference
is intended with respect to the federal income tax treatment of
‘parking’ transactions that do not satisfy the terms of the safe
harbor”. Rev. Proc. 2000-37, 2000-40 I.R.B. 308.
Because the revenue procedure is prospectively effective, it
does not apply to the case at hand. See id. We therefore have
5(...continued)
Application of Section 1031 to Reverse Exchanges, 21 J. Real Est.
Tax. 44 (1993); Handler, Pricewaterhouse Coopers Forwards
Proposed Guidance on Reverse Exchanges, 2000 TNT 16-27, Doc.
2000-2588 (Jan. 25, 2000); Safe Harbor Guidance for Reverse Like-
kind Exchanges To Come Soon, IRS Official Promises, Highlights
and Documents 1157 (Jan. 25, 2000).
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