Held, although this exchange of joint venture interests meets the requirements of sec. 1031(a), petitioners' motion is denied because a question of material fact, namely whether the underlying assets of the joint ventures are stock in trade or other property held primarily for sale, must be resolved in order to decide whether the exchange 1031(a). Estate of Meyer v. Commissioner, 58 T.C. 311 (1972), affd. 503 F.2d 556 (9th Cir. 1974), followed. Jules I. Whitman and Thomas E. Doran, for the petitioners.

It is well established that, in general, an exchange of general partnership interests is an exchange of property of like kind, but that an exchange of a general partnership interest for a limited partnership interest is not an exchange of property of like kind. Estate of Meyer v. Commissioner, 58 T.C. 311 (1972), affd. 503 F.2d 556 (9th Cir. 1974); Gulfstream Land & Development v. Commissioner, 71 T.C. 587 (1979); Long v. Commissioner, 77 T.C. 1045 (1981); Miller v. United States, an unreported case (S.D. Ind. 1963, 12 AFTR 2d 5244, 63-2 USTC par. 9606). First, respondent contends that a partnership interest is an “evidence of interest” described in the parenthetical language of section 1031(a); therefore, gain from both of the exchanges of partnership interests in 1976 must be recognized.

It is well established that, in general, an exchange of general partnership interests is an exchange of property of like kind, but that an exchange of a general partnership interest for a limited partnership interest is not an exchange of property of like kind. Estate of Meyer v. Commissioner, 58 T.C. 311 (1972), affd. 503 F.2d 556 (9th Cir. 1974); Gulfstream Land Development v. Commissioner, 71 T.C. 587 (1979); Long v. Commissioner, 77 T.C. 1045 (1981); Miller v. United States, an unreported case (S.D. Ind. 1963, 12 AFTR 2d 5244, 63-2 USTC par. 9606). First, respondent contends that a partnership interest is an "evidence of interest" described in the parenthetical language of section 1031 (a); therefore, gain from both of the exchanges of partnership interests in 1976 must be recognized.

If respondent prevails on this issue, it would follow that the exchange was of a general partnership interest for a limited partnership interest (or a non-partnership interest) and, therefore, the exchange would not qualify as a like kind exchange under section 1031 (a). Estate of Meyer v. Commissioner, 58 T.C. 311 (1972), affd. per curiam on this issue 503 F.2d 556 (9th Cir. 1974). Respondent contends that Venture Twenty-One, as a joint venture, is not a partnership for the purposes of section 1031 because the joint venture agreement specifically stated that "The parties hereto intend for this undertaking to be the creation and establishment of a Joint Venture, rather than the creation and establishment of a partnership."

If respondent prevails on this issue, it would follow that the exchange was of a general partnership interest for a limited partnership interest (or a non-partnership interest) and, therefore, the exchange would not qualify as a like kind exchange under section 1031(a). Estate of Meyer v. Commissioner, 58 T.C. 311 (1972), affd. per curiam on this issue 503 F.2d 556 (9th Cir. 1974). Respondent contends that Venture Twenty-One, as a joint venture, is not a partnership for the purposes of section 1031 because the joint venture agreement specifically stated that “The parties hereto intend for this undertaking to be the creation and establishment of a Joint Venture, rather than the creation and establishment of a partnership.”