Magneson v. Commissioner
United States Tax Court
Petitioners exchanged their fee simple interest in I real property for an undivided 10-percent interest in P real property which they immediately contributed to a partnership for a general partnership interest. P and I are properties of like kind. Held, the exchange of I for P qualifies for nonrecognition of gain under sec. 1031(a), I.R.C. 1954, because petitioners held P for productive use in trade or business or for investment.
1DissentTannenwald, Judge
I disagree with the holding of the majority that the requirements of section 1031 were satisfied because the contribution of the Plaza Property by petitioner to U.S. Trust (the partnership) was simply "a continuation of the old investment unliquidated in modified form” (see pp. 770-771).
The rationale of continuity of investment rests on the false premise that "joint ownership of the property and partnership ownership of the property are merely formal differences and not substantial differences”1 (see p. 773), and that, therefore, the "like-kind” requirement of the section has been met. I use…
2Cases cited40 opinions
- Commissioner v. Court Holding Co.Supreme Court of the United States · 1945
- Aquilino v. United StatesSupreme Court of the United States · 1960
- United States v. Cumberland Public Service Co.Supreme Court of the United States · 1950
- Commissioner v. National Alfalfa Dehydrating & Milling Co.Supreme Court of the United States · 1974
- Foxman v. CommissionerUnited States Tax Court · 1964
35 more not listed; retrieve them via the Exa API.