124 T.C. No. 4
UNITED STATES TAX COURT
TERUYA BROTHERS, LTD. & SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17955-03. Filed February 9, 2005.
In 1995, in a series of planned transactions, P
transferred real properties to a qualified
intermediary, TGE, which then sold them to unrelated
third parties. TGE used the sale proceeds, as well as
additional funds from P, to purchase like-kind
replacement properties for P from a corporation related
to P.
Held: The transactions in question were
structured to avoid the purposes of sec. 1031(f),
I.R.C., governing like-kind exchanges between related
persons. Under sec. 1031(f)(4), I.R.C., P is not
entitled to defer gains realized on the exchanges.
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