116 T.C. No. 29 UNITED STATES TAX COURT D. G. SMALLEY AND NELL R. SMALLEY, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 2767-98. Filed June 14, 2001. In 1994, H entered into a deferred exchange whereby he relinquished 2-year timber cutting rights on his land and in return received in 1995 fee simple interests in three parcels of real estate. The transferee’s obligation to transfer replacement property to H was secured by cash held in a qualified escrow account as defined in sec. 1.1031(k)-1(g)(3), Income Tax Regs. Held: At the beginning of the exchange period, H had a bona fide intent to enter into a deferred exchange of like-kind property within the meaning of sec. 1.1031(k)-1(j)(2)(iv), Income Tax Regs. Under sec. 1.1031(k)-1(g)(3) and (j)(2), Income Tax Regs., H was not in actual or constructive receipt of property in 1994, and under the installment sale rules of sec. 453, I.R.C., Ps are not required to recognize income from the deferred exchange in 1994.Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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