Rev. Rul. 60-43

The Internal Revenue Service will not follow the decision in Jordan Marsh Company v. Commissioner , 269 Fed.(2d) 453.

The United States Court of Appeals for the Second Circuit, in reversing the Tax Court, held that a transaction whereby the taxpayer in 1944 conveyed the fee of parcels of property used for its department store to a stranger for cash, equivalent to their fair market value, must be treated as a separate sale, even though, simultaneously, the property was leased back to the taxpayer for the same use at a fair and normal rental for a term of 30 years plus three days, with an option to renew for a similar term if the taxpayer as `lessee' should erect new buildings on the property.

The Court of Appeals maintained that Century Electric Co. v. Commissioner , 192 Fed.(2d) 155, certiorari denied 342 U.S. 954, relied upon by the Government, was distinguishable on its facts.

It is the position of the Service that a sale and leaseback under the circumstances here present constitute, in substance, a single integrated transaction under which there is an `exchange' of property of like kind with cash as boot.

¹ Based on Technical Information Release 194, dated December 18, 1959.