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.
The court does not have to take posession of the property in question. It directed the sale against the wishes of the owner of that property. That meets the requirement of seizure.
For purposes of Section 1033, the restriction means that the end use of the new property must be substantially similar to the end use of the old property. So for example, a taxpayer that lost timberland property used for logging could not replace that property with a parking lot and qualify for non-recognition under Section 1033.
Property that has been converted via seizure, or requisition or condemned enjoys more liberal treatment, and instead of being judged by the “similar or related in use” standard, is determined by expansive definition of like-kind similar to that of Section 1031. This means for the purposes of condemned property, the replacement property will be deemed to be like-kind and the requirements met so long as both the condemned and the replacement property are characterized as the same type of property by law.
Thus the property, stock in an entertainment corporation) would potientially be converted to stock in an entertainment corporation. This would enable Sterling to convert to just about any entertainment industry company or holding.
For example, lets consider a farm that has been involuntary converted that is in the agriculture business (grows corn). Assuming that the conversion was to stock of another agriculture business (cattle ranch), it would be of “like-kind”.