Donald DeCleene and Doris DeCleene - Page 21




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          relinquished the McDonald Street property to WLC--was the payment           
          received by petitioner from WLC the sale price of the McDonald              
          Street property at the December 29 closing, as respondent                   
          determined?  Or was it the deferred purchase price on                       
          petitioner’s September 24 quitclaim transfer of title to the                
          unimproved Lawrence Drive property (which petitioner received               
          back on December 29 from WLC with the substantially completed               
          building that had been erected on it in the intervening 3                   
          months), as petitioner reported?                                            
               Our approach to answering these questions is to determine              
          for tax purposes whether WLC became the owner of the Lawrence               
          Drive property during the 3-month period it held title to the               
          property while the building was being built on it to petitioner’s           
          specifications.  If petitioner remained the owner of the Lawrence           
          Drive property during this period, petitioner could not engage in           
          a qualified like-kind exchange of the McDonald Street property              
          for the Lawrence Drive property, and the $142,400 payment                   
          received by petitioner would be deemed the sale price of the                
          McDonald Street property.  A taxpayer cannot engage in an                   
          exchange with himself; an exchange ordinarily requires a                    
          “reciprocal transfer of property, as distinguished from a                   
          transfer of property for a money consideration”.  Sec. 1.1002-              
          1(d), Income Tax Regs.                                                      







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