Robert K. and Dawn E. Lowry - Page 9

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          argument that petitioners are estopped by the rule of consistency           
          from claiming that the section 1231 gain should be recognized for           
          tax purposes in 1993.                                                       
               Petitioners essentially base their argument on (1) the fact            
          that the Grant Deed and the Covenant Not to Sue agreement are               
          dated December 15, 1993, and (2) the fact that AAL issued a 1993            
          Form 1099-A, showing the “date of lender’s acquisition” of the              
          Fitch Property to be “12-15-93”.  Petitioners argue that all                
          subsequent actions were for the benefit of AAL, and of no further           
          concern to the Partnership.                                                 
               Past decisions of this Court and California law, as applied            
          to the facts of this case, do not support petitioners’ argument             
          that the transaction was completed in 1993.  The escrow                     
          instructions, dated December 9, 1993, recite that they were being           
          issued to the Title Company on behalf of AAL and the Partnership.           
          The instructions were consented to by George H. Wells, signing as           
          a general partner of “Lowry & Wells Investments, a California               
          partnership.”  Also, as noted above, the Grant Deed recited that            
          the Grantor and Grantee intend that the lien created by the Deed            
          of Trust would not merge into the fee title being acquired by the           
          Grantee.  The Grant Deed further recites that no merger will                
          occur until the Grantee executes and records a separate                     
          instrument specifically effecting such merger.  These facts alone           
          repudiate petitioners’ contention that “The subsequent actions by           






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