SMALLEY v. COMMISSIONER OF INTERNAL REVENUE
United States Tax Court
In 1994, H entered into a deferred exchange whereby he relinquished 2-year timber cutting rights on his land and in return received in 1995 fee simple interests in three parcels of real estate. The transferee's obligation to transfer replacement property to H was secured by cash held in a qualified escrow account as defined in sec. 1.1031(k)-1(g)(3), Income Tax Regs.
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In 1994, H entered into a deferred exchange whereby he relinquished 2-year timber cutting rights on his land and in return received in 1995 fee simple interests in three parcels of real estate. The transferee's obligation to transfer replacement property to H was secured by cash held in a qualified escrow account as defined in sec. 1.1031(k)-1(g)(3), Income Tax Regs. HELD: At the beginning of the exchange period, H had a bona fide intent to enter into a deferred exchange of like-kind property within the meaning of sec. 1.1031(k)-1(j)(2)(iv), Income Tax Regs. Under sec. 1.1031(k)-1(g)(3) and…
1Opinion of the Court
Thornton, Judge:
Respondent determined a $139,180 deficiency in petitioners’ joint 1994 Federal income tax. After concessions, the sole issue for decision is whether petitioners are required to recognize income in 1994 as the result of a deferred exchange that petitioner husband (petitioner) entered into in 1994 and that was completed in 1995.
Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for taxable year 1994. Rule references are to the Tax Court Rules of Practice and Procedure.
FINDINGS OF FACT
The parties have stipulated some of the facts, which…
2Cases cited27 opinions
- Commissioner v. P. G. Lake, Inc.Supreme Court of the United States · 1958
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- Seligman v. CommissionerUnited States Tax Court · 1985
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- McRae v. Stillwell, Millen & Co.Supreme Court of Georgia · 1900
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