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Also on November 29, 1994, petitioner, Rayonier, and Lewis
executed an escrow agreement. The agreement states that
petitioner “intends for his exchange under * * * [the timber
contract] to permit * * * [petitioner] to report the receipt of
the exchange property under the income tax deferral rules of
Section 1031(a) of the Internal Revenue Code”. The escrow
agreement provides that on the closing of the timber contract,
Rayonier will deliver to Lewis the net purchase price ($517,076
less $12,141 ad valorem taxes) to be held in escrow and paid out
as provided in the escrow agreement. The escrow agreement
(wherein petitioner is referred to as Seller and Rayonier is
referred to as Purchaser) further provides in part:
3.
Seller will designate certain real estate referred
to in a Tax Free Exchange Agreement between Purchaser
and Seller, which shall be acquired by Purchaser and
transferred to Purchaser. The Escrow Agent agrees to
apply the funds toward the purchase of the property as
directed by the Purchaser.
* * * * * * *
6.
Title to the exchange property shall be acquired
in the name of the Escrow Agent, as Agent for the
Purchaser, and then conveyed by Escrow Agent to Seller.
In the event the costs of acquiring and thereafter
conveying the exchange property can be reduced by a
direct transfer from the Seller [sic] of the exchange
property to Seller, the Escrow Agent may arrange for a
direct transfer to Seller upon receipt by Escrow Agent
of a request from Seller.
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Last modified: May 25, 2011