Forward Exchanges

Section 1031 Tax Deferred Exchanges - A Review of the Final Regulations

Tax deferred exchanges of real estate have been recognized by the Internal Revenue CodeInternal Revenue Code since the 1920s. A variety of factors have converged the past several years leading to a dramatic increase in the popularity of tax deferred exchanges as an alternative to real property sales.

1031 Exchange Cooperation Clause

Due to changes in 1031 exchange

Internal Revenue Code Section 1031

Under Internal Revenue Code (IRC) section 1031, no gain or loss is recognized when companies sell business or investment property and acquire property that is like-kind. A transaction that is structured as a tax-deferred exchange is generally referred to as a "like-kind exchange" or an "LKE". Equipment dealers, car rental companies, and other organizations that routinely dispose of business assets can realize substantial benefits from an ongoing program of exchanges (referred to as an LKE Program).

Deferred Exchanges: Avoiding Traps for the Unwary

Tax-deferred exchanges of real estate have been recognized by the Internal Revenue CodeInternal Revenue Code since the 1920s. Recently, various factors have converged leading to a marked increase in the use of tax-deferred exchanges as an alternative to outright real property sales. Two of the principalprincipal factors resulting in the current popularity of tax-deferred exchanges are the increase in the maximum capital gaincapital gain rate and the practical implications of the legal decision in Starker v. United States. Although simultaneous exchanges had been employed for a long time, the landmark Starker case opened a window of opportunity for valid exchanges on a nonsimultaneous basisbasis .

Understanding Tax-Deferred Exchanges of Real Estate

The concept of tax-deferred exchanges is quite simple: If one trades property for like-kindlike-kind property and does not receive any cash or other non-like-kind property, then no profit has been made, and there are no immediate tax consequences. While the basisbasis in the replacement propertyreplacement property is affected, any gain is deferred until the eventual sale of the replacement property.

Tax-deferred exchanges of real estate and personal property have been recognized by the I.R.C. since the 1920s, and regulations introduced in 1991 made structuring such transactions easier.

Rev. Proc. 2008-16: Exchanges of Vacation Homes and Rental Property

This revenue procedure provides a safe harborsafe harbor under which the Internal Revenue Service (the “Service”) will not challenge whether a dwelling unit qualifies as property held for productive use in a trade or business or for investment for purposes of § 1031 of the Internal Revenue CodeInternal Revenue Code .

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Forward Exchanges

Section 1031 Tax Deferred Exchanges - A Review of the Final Regulations

1031 Exchange Cooperation Clause

Internal Revenue Code Section 1031

Deferred Exchanges: Avoiding Traps for the Unwary

Understanding Tax-Deferred Exchanges of Real Estate

Rev. Proc. 2008-16: Exchanges of Vacation Homes and Rental Property

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Forward Exchanges

Section 1031 Tax Deferred Exchanges - A Review of the Final Regulations

1031 Exchange Cooperation Clause

Internal Revenue Code Section 1031

Deferred Exchanges: Avoiding Traps for the Unwary

Understanding Tax-Deferred Exchanges of Real Estate

Rev. Proc. 2008-16: Exchanges of Vacation Homes and Rental Property

Library Categories

Secondary menu