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like-kind exchange, respondent has erroneously determined that
they realized income from the transaction in 1994. Relying on
section 1.1031(k)-1(g)(3) and (j), Income Tax Regs., petitioners
argue that they realized no gain in 1994 because they had no
actual or constructive receipt of property in 1994.
Respondent contends that petitioners have improperly raised
this issue for the first time on brief. Respondent alleges, and
petitioners do not dispute, that the 3-year limitations period
for respondent to assess tax for taxable year 1995 ran shortly
after the trial date of this case and shortly before the date
respondent received a copy of petitioners’ brief. Respondent
contends that because of this circumstance, he is “especially
prejudiced” by petitioners’ delay in raising their alternative
arguments.
In a memorandum filed with the Court in response to
respondent’s arguments on reply brief, petitioners argue that
they raised what they characterize as the “receipt issue”
frequently before and during trial. In their memorandum,
petitioners catalog various references in their petition, their
trial memorandum, the parties’ stipulations of facts, and
statements at trial to arguments or facts or circumstances in
support of arguments that in 1994 petitioner never received or
had access to or control over any moneys incident to the exchange
in question.
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