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risk of loss or opportunity for gain, no exposure to real estate
taxes or other carrying charges, no liability even for interest
on its nonrecourse secured obligation during the interim period.
All we are left with, as in Bloomington Coca-Cola Bottling Co.,
is that a building was built for petitioner according to his
specifications on land that he owned and petitioner was obligated
to pay for that building. The taxpayer in Bloomington Coca-Cola
Bottling Co. and petitioner also sold their old property to the
party with whom they dealt in connection with the building of the
new facility.7
Authorities Relied on by Petitioners
We now turn to the cases petitioners rely on to support
their contention that petitioner exchanged the McDonald Street
property for the substantially improved Lawrence Drive property:
J.H. Baird Publg. Co. v. Commissioner, 39 T.C. 608 (1962); Coupe
7 We have found no other like-kind exchange cases in the
Seventh Circuit that bear on the issue in the case at hand.
However, another Seventh Circuit case worth noting is Patton v.
Jonas, 249 F.2d 375 (7th Cir. 1957), which applies the same
analysis as the line of Sixth Circuit cases culminating in First
Am. Natl. Bank of Nashville v. United States, 467 F.2d 1098 (6th
Cir. 1972), which hold that “repo” transactions in tax-exempt
bonds are to be treated as secured loans so that the purchaser in
form is treated as a lender not entitled to exclude the tax-
exempt bond interest from its income; this is because the
original seller remains the owner of the bonds for tax purposes.
See also Green v. Commissioner, 367 F.2d 823, 825 (7th Cir.
1966), affg. T.C. Memo. 1965-272; Commercial Capital Corp. v.
Commissioner, T.C. Memo. 1968-186. Compare Rev. Rul. 74-27,
1974-1 C.B. 24 (repurchase obligation) with Rev. Rul. 82-144,
1982-2 C.B. 34 (separately purchased and paid-for put).
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