11th Circuit Court of Appeals Affirms Ocmulgee Fields, Inc. 132 T.C. 105 (2009).
The 11th Circuit Court of Appeals has affirmed the decision in Ocmulgee Fields, Inc. which involved the acquisition of replacement property from a related party.
The Tax Court concluded the exchange was disallowed based on the provisions of Section 1031(f)(4), that the transaction, or series of transactions, were structured solely to avoid the purposes of the related party rules under Section 1031(f).
Ocmulgee, in its appeal, argued the Tax Court’s factual findings were erroneous and that neither the Taxpayer nor the related party intended to subvert the related party rules, and provided a list of explanations for why the exchange was structured as it was.
The Circuit Court found Ocmulgees’ explanations non-persuasive and concluded the Tax Court did not err in its holding.
