(A) Nonrecognition of gain --
If the taxpayer during the period specified in subparagraph (B), for the purpose of replacing the property so converted, purchases other property similar or related in service or use to the property so converted, or purchases stock in the acquisition of control of a corporation owning such other property, at the election of the taxpayer the gain shall be recognized only to the extent that the amount realized upon such conversion (regardless of whether such amount is received in one or more taxable years) exceeds the cost of such other property or such stock. Such election shall be made at such time and in such manner as the Secretary may by regulations prescribe. For purposes of this paragraph ...
Further, this is a forced sale as it qualifies as a "seizure". In the law of civil practice, the term refers to the act performed by an officer of the law under court order when she takes into custody the property of a person against whom a court has rendered a judgment to pay a certain amount of money to another.
Believe me that Sterling has enough lawyer clout to make it stick. Further, it would counter intuitive for a court to say that the sale has to go through and then invalidate that order by declaring that judgement is optional. There is no doubt that Stirling will use this judgement in tax court to show that the sale was forced and as such, is able to take advantage of section 1033.
But you still have the 'similar or related in service or use' issue. I don't think that the courts will accept anything other than another sports franchise as filling that requirement.
Further, this is a forced sale as it qualifies as a "seizure". In the law of civil practice, the term refers to the act performed by an officer of the law under court order when she takes into custody the property of a person against whom a court has rendered a judgment to pay a certain amount of money to another.
Except that the court did not take custody of the property. Nothing was seized. The court ruled that because Donald Sterling had been ruled mentally incometent then Shelly Sterling was in charge of the trust and could sell the team as she wished. Nobody forced her to sell.
Believe me that Sterling has enough lawyer clout to make it stick. Further, it would counter intuitive for a court to say that the sale has to go through and then invalidate that order by declaring that judgement is optional. There is no doubt that Stirling will use this judgement in tax court to show that the sale was forced and as such, is able to take advantage of section 1033.
Sterling has been declared mentally incompetent and the judge has ruled that Shelly Sterling can proceed with the sale. Sterling will wind up suing nobody but his wife.