A reverse like-kind exchange is just that, a like-kind exchange done in reverse. In a typical like-kind exchange, also known as a forward exchange, a property owner sells a property and uses the proceeds to buy a replacement...more
As the 46th president of the United States, Joe Biden has set some ambitious policy goals that will have far-reaching effects on the commercial real estate market. However, until recently, most experts assumed his platform...more
The Taxable Exchange- As a general rule, a taxpayer’s exchange of one property for another property is treated as a taxable event; the gain realized by the taxpayer – meaning the amount by which the fair market value of...more
On April 9, 2020, the Internal Revenue Service issued Notice 2020-23 extending certain deadlines provided by the Internal Revenue Code for taxpayers either engaging in Section 1031 like-kind exchanges or making investments in...more
On April 9, 2020, following issuance by the President of the United States of an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act on March 13, 2020, the Secretary of the U.S....more
On January 28, 2020, the California Office of Tax Appeals (OTA) denied the California Franchise Tax Board’s (FTB) request to rehear In the Matter of the Appeal of Sharon Mitchell (OTA Case No. 18011715). This decision may...more
Within the past year, the IRS has not changed its position on the way they are treating the taxation and reporting of digital token transactions. This alert serves as an update to last year’s rundown of cryptocurrency...more
Counting Days- Do you know what June 29, 2019 is? Of course you do. It’s a Saturday. It’s also the 180th day of the period that began on January 1, 2019. Need another hint? ...more
Yesterday, in Part I, we reviewed the like-kind exchange rules. Now we turn to the new kid on the block. Qualified Opportunity Zones- The Act added Section 1400Z-2 to the Code, which allows a taxpayer to elect to...more
The Act- Among the business transactions on which the Tax Cuts and Jobs Act has had, and will continue to have, a significant impact is the disposition of a taxpayer’s interest in real property, whether held directly or...more
One of the lessor discussed items in the recently enacted Tax Cuts and Jobs Act (“TCJA”) has been the change to Section 1031, limiting the like-kind exchange provisions to exchanges of real property only. Section 1031 of...more
In a “Sizing Up in Violins and Investment Real Estate,” another post in the Orchestrating Real Estate series, I discussed how buying increasingly larger (and more expensive) violins compares to real estate investments. I...more
Section 1031 of the tax code allows sellers of investment property to defer capital gains if the proceeds are reinvested in "like kind" property within certain timeframes. Prior to 2018, 1031 exchanges could be used for many...more
Business owners have long taken advantage of the tax deferral benefits of so-called “1031 exchanges” or “like-kind exchanges.” Generally, an exchange of property, like a sale, is a taxable event. However, Section 1031 of the...more
When you are selling vacant land or non-owner occupied property held for commercial or investment purposes, you need to consider structuring the sale as an Internal Revenue Code ("Code") Section 1031 Tax-Deferred Exchange,...more
BACKGROUND - On February 21, 2014, then House Ways and Means Committee Chairman Dave Camp (R-Michigan) issued a discussion draft of the “Tax Reform Act of 2014.” The proposed legislation spanned almost 1,000 pages and...more
In most areas of law, substance prevails over form. Code Section 1031 is possibly one of the few exceptions to this time-honored rule of jurisprudence. Under Code Section 1031, form may prevail over substance. The U.S. Tax...more
This is part one of a two-part series on Internal Revenue Code Section 1031 Tax-Deferred property exchanges. This first article will provide an overview of the rules that govern 1031 exchanges. Part two will deal with the...more
In the recently decided case of Estate of George H. Bartell v. Commissioner, 147 T.C. No. 5 (August 10, 2016), the U.S. Tax Court held that the like-kind exchange engaged in by the taxpayer’s S corporation should be respected...more
Background - Actual or constructive receipt of the exchange funds during a deferred exchange under IRC Section 1031 totally kills an exchange and any tax deferral opportunity. Treasury Regulation Section 1031(k)-1(f)(1)...more