- 17 -
Accordingly, we turn to consideration of that issue.
D. Bona Fide Intent Test
Section 1.1031(k)-1(j)(2)(iv), Income Tax Regs., provides:
Bona fide intent requirement. The provisions of
paragraphs (j)(2)(i) and (ii) of this section [which
coordinate gain recognition rules under sections 453
and 1031 with respect to a deferred exchange involving
a qualified escrow account, qualified trust, or
qualified intermediary] do not apply unless the
taxpayer has a bona fide intent to enter into a
deferred exchange at the beginning of the exchange
period. A taxpayer will be treated as having a bona
fide intent only if it is reasonable to believe, based
on all the facts and circumstances as of the beginning
of the exchange period, that like-kind replacement
property will be acquired before the end of the
exchange period.
In arguing that petitioner lacked the requisite bona fide
intent, respondent takes issue only with whether it was
reasonable for petitioner to believe that the property he
relinquished and the properties he received in the subject
transaction were of like kind within the meaning of section 1031.
Respondent does not contend that petitioner otherwise failed to
satisfy the requirements of section 1.1031(k)-1(j)(2)(iv), Income
6(...continued)
equivalent held in the escrow account as provided in
paragraph (g)(6) of this section.
Furthermore, respondent has not contended that the subject
transaction fails to meet any of the conditions for application
of sec. 453, other than as relate to the satisfaction of the bona
fide intent requirement of sec. 1.1031(k)-1(j)(2)(iv), Income Tax
Regs.
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