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determined no negligence penalty or other penalty with regard to
the subject transaction, from which we infer that respondent does
not dispute that petitioners had reasonable cause and acted in
good faith in treating the subject transaction as a tax-deferred
like-kind exchange within the meaning of section 1031. See sec.
6664(c)(1) (no accuracy-related penalty is to be imposed to the
extent there was reasonable cause and the taxpayer acted in good
faith).
E. Application of the Bona Fide Intent Test
In Oregon Lumber Co. v. Commissioner, 20 T.C. 192 (1953),
the taxpayer conveyed to the United States certain land adjoining
national forests in Oregon and containing a specified amount of
standing timber. In exchange, the United States granted the
taxpayer the right to cut and remove national forest timber of
equal value on acreage to be definitely designated by the
national forest officer before cutting. This Court concluded
that under Oregon State law, because an agreement to cut and
remove standing timber from the land immediately or within a
reasonable time was an agreement for the sale of goods only, the
property rights acquired under the agreement were personalty.
See id. at 196. Accordingly, this Court held that the taxpayer’s
exchange was of realty for personalty and was thus not an
exchange of properties of like kind. See id.
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