- A §1031 Exchange Does Not Occur Under "Duress"
- July 10, 2015 | Author: Elliott B. Pollack
- Law Firm: Pullman & Comley, LLC - Hartford Office
After purchasing a small commercial building in Old Greenwich in 2007, the property owner challenged the Town of Greenwich’s revaluation market value of almost $2.7 million as of October 1, 2010.
The owner asserted that its need to effectuate a “like kind exchange” under the Internal Revenue Code resulted in an atypical quasi-compulsory transaction which did not reflect market value.
“No one forced (the purchaser) .... to purchase the property. The fact that (its principal owner) may have felt some internal pressure to purchase a property within a certain time frame does not significantly distinguish this case from the many potential purchasers and sellers on the free market who must act quickly before their best opportunity slips away,” Judge Carl Schuman wrote. “It is surely the rare case,” he noted, “in which someone purchases or sells real property at precisely the price he or she had in mind without the influence of some other factor.”
The property owner’s appraiser’s refusal to consider the sale as a data point in developing his comparable sales analysis was rejected by the Court. The transaction of the subject property “is not only comparable,” the Court noted, “it is identical.”