In a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange , acquiring Replacement Property from a Related Party is generally prohibite

A This refers to a type of exchange done where some of the proceeds of the sale of the relinquished property will be used to cause improvements to be placed on the land constituting the replacement property so that the taxpayer can complete the trade where both the value of the land and of the improvements will count for the amount the taxpayer traded for. These types of exchanges are structured pursuant to IRS Rev. Proc.

When an exchange involves replacement (new) property that is land to be constructed upon or a structure requiring improvements, a build-to-suit or a property improvement exchange will allow for the inclusion of the improvement costs in the exchange value of the replacement property. If the relinquished property is sold prior to the acquisition and improvement of the replacement property, the exchange is a FORWARD build-to-suit or improvement exchange.

(“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.

Parent is a publicly-traded State A corporation that is engaged in the business of owning and operating C Facilities. Parent is the sole shareholder of several subsidiaries, including (“Exchangor" or "Exchanger") Individual or entity desiring an exchange. Taxpayer .