Donald DeCleene and Doris DeCleene - Page 20

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          recourse to general principles of tax law to answer the question            
          posed by repondent’s determination.                                         
          Analysis and Conclusion                                                     
               In the case at hand, petitioner did not just locate and                
          identify the Lawrence Drive property in anticipation of acquiring           
          it as replacement property in exchange for the McDonald Street              
          property that he intended to relinquish.  He purchased the                  
          Lawrence Drive property without the participation of an exchange            
          facilitator a year or more before he was ready to relinquish the            
          McDonald Street property and relocate his business to the                   
          Lawrence Drive property.  In the following year, petitioner                 
          transferred title to the Lawrence Drive property, subject to a              
          reacquisition agreement--the Exchange Agreement--not to a third-            
          party exchange facilitator, but to WLC, the party to which he               
          simultaneously obligated himself to relinquish the McDonald                 
          Street property.                                                            
               In forgoing the use of a third party and doing all the                 
          transfers with WLC, petitioner and his advisers created an                  
          inherently ambiguous situation.  The ambiguity is exacerbated by            
          the fact that petitioner and WLC agreed in the Exchange Agreement           
          that the McDonald Street property and the unimproved Lawrence               
          Drive property were of equal value, $142,400.  So when WLC paid             
          petitioner $142,400--at the same time that he permanently                   

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