- 19 -
In sum, petitioner has failed to persuade us that avoidance
of Federal income tax was not one of the principal purposes of
the Ocean Vista and Royal Towers transactions.
VI. Conclusion
Petitioner offers no explanation for Teruya’s use of the
qualified intermediary in the Ocean Vista and Royal Towers
transactions. We infer that the qualified intermediary was
interposed in an attempt to circumvent the section 1031(f)(1)
limitations that would have applied to exchanges directly between
related persons. Petitioner has failed to show that avoidance of
Federal income tax was not one of the principal purposes of the
Ocean Vista and Royal Towers transactions. We conclude that
these transactions were structured to avoid the purposes of
section 1031(f). Consequently, petitioner is not entitled, under
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011