Donald DeCleene and Doris DeCleene - Page 28

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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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