Appeals Court Upholds Tax Court’s Section 1031 Decision Pivoting on ‘Tainted Appraisals’

BVLaw
Court Case Digests
October 3, 2018
4911 Electric Services
221112 Fossil Fuel Electric Power Generation
federal taxation
cost approach, expert testimony, appraisal, discounted cash flow (DCF), fair market value (FMV), like-kind exchange, capital gains, income tax, accuracy penalty

Exelon Corp. v. Commissioner
2018 U.S. App. LEXIS 28023
US
Federal Court
7th Circuit
United States Court of Appeals for the 7th Circuit
Professor Stewart Myers, Nancy Heller Hughes (trial experts, taxpayer/appellant); Deloitte & Touche LLP Valuation Group (appraiser, taxpayer); Dr. Douglas J. Skinner (trial expert, IRS/appellee)
Gettleman

Summary

Appeals court upholds Tax Court’s ruling that taxpayer’s transactions do not represent section 1031 like-kind exchanges because taxpayer never assumed ownership of replacement plants; improper input from taxpayer’s law firm tainted appraisals used to show otherwise; accuracy penalty is justified.

See Also

Exelon Corp. v. Commissioner

Appeals court upholds Tax Court’s ruling that taxpayer’s transactions do not represent section 1031 like-kind exchanges because taxpayer never assumed ownership of replacement plants; improper input from taxpayer’s law firm tainted appraisals used to show otherwise; accuracy penalty is justified.