IRS Private Letter Ruling PLR 201408019 - Build-to-Suit

(“Exchangor" or "Exchanger") Individual or entity desiring an exchange. Taxpayer is a limited liability company that is treated as a partnership for federal income tax purposes. (“Exchangor" or "Exchanger") Individual or entity desiring an exchange. Taxpayer uses an overall accrual method of accounting for filing its federal income tax returns and uses an accounting period ending December 31. (“Exchangor" or "Exchanger") Individual or entity desiring an exchange. Taxpayer is owned X percent by DE, a disregarded entity for federal income tax that is wholly owned by LP, and Y percent by Management Co., a taxable real estate investment trust (“REIT”) subsidiary under § 856(l), which is also wholly owned by LP. LP is an affiliate of Trust, and Trust is a publicly held statutory REIT organized in State A that elected to be taxed as a REIT at all times beginning with Taxable Year 1. LP and (“Exchangor" or "Exchanger") Individual or entity desiring an exchange. Taxpayer are related under § 1031(f)(3).

Taxpayer will enter into an agreement with an unrelated third party to sell relinquished property (RQ), a retail building. Taxpayer will then enter into an exchange agreement (“QI Agreement”) with QI as the Qualified A person acting to facilitate an exchange under section 1031 and the regulations. This person may not be the taxpayer or a disqualified person. Section 1.1031(k)-1(g)(4)(iii) requires that, for an intermediary to be a qualified intermediary, the intermediary must enter into a written "exchange" agreement with the taxpayer and, as required by the exchange agreement, acquire the relinquished property from the taxpayer, transfer the relinquished property, acquire the replacement property, and transfer the replacement property to the taxpayer. Intermediary , to whom it will assign its rights in the contract to sell RQ, with notice being given to the buyer. Taxpayer represents that QI is not Taxpayer or a disqualified person as defined in § 1.1031(k)-1(k). QI Agreement expressly limits Taxpayer’s rights to receive, pledge, borrow, or otherwise obtain the benefits of money or other property held by QI as provided in § 1.1031(k)-1(g)(6).