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potential renewals) could have a duration or term lasting 30 or
more years. Petitioner’s argument is based on section 1.1031(a)-
1(c), Income Tax Regs., which provides a safe harbor for a 30-
year or greater leasehold of a fee to qualify as “like kind” to a
fee interest in real property.
Finally, petitioner places reliance in Koch v. Commissioner,
71 T.C. 54, 65-70 (1978), a case which petitioner contends is
indistinguishable from the circumstances we consider here. In
that case, this Court held that two parcels of fee simple real
property were like kind, under section 1031(a), even though one
parcel was subject to 99-year condominium leases. In Koch, it
was reasoned that the leases did not constitute boot because they
were not separable from the fee simple real property interest.
B. Respondent’s Arguments
Conversely, respondent contends that the fact that the
supply contracts are treated as real property interests under New
Mexico law does not conclusively establish that they are like
kind to the gold mining property Peabody transferred. Respondent
argues that like kind status of the supply contracts, for
purposes of section 1031, is a question of Federal tax law.
Respondent also notes that section 1031 case precedent does not
support the axiom that exchanges of real property are ipso facto
like kind. On this point, see Koch v. Commissioner, supra at 64-
65 (citing Fleming v. Commissioner, 24 T.C. 818, 823-824 (1955),
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