Category Archives: FAQ

No, with extremely limited exceptions, partnership interests are not like kind property. After much confusion, the Internal Revenue Code was amended in 1984 to specifically prohibit the deferral of tax on an exchange of partnership interests. Similarly, the exclusion clarified … Continue reading →

Yes! Partnerships and corporations are legal entities and, as such, are allowed to exchange partnership property (as opposed to a partner's partnership interest) under I.R.C. Section 1031. Remember, these transactions involve the partnership trading the partnership's real property.

It is generally accepted that, if a partnership is dissolved and the partner's partnership interest are converted upon distribution into divided or undivided real property ownership interests, the partners may than be able to trade such real property interests under … Continue reading →

An Intermediary is required in all transactions other than those outlined below: A two-party simultaneous exchange. (*Please see note below.) Benefit: Simple and Cost-Effective NOTE: The only safe harbor recommended by the Treasury Department for simultaneous exchanges is the use … Continue reading →

The intermediary typically serves many functions during an exchange. If the exchanger actually or “constructively” receives any or all of the proceeds of the sale of the relinquished property, the exchange will not be valid. (This rule would not apply … Continue reading →

An Intermediary is that entity or person who: Acts as the middle-man or "straw-man" in exchange transactions Holds the proceeds of the sale of the relinquished property; does and buying of replacement property or selling of the relinquished property necessary … Continue reading →

No. "Disqualified Persons" may not be Qualified Intermediaries. With limited exceptions, a Disqualified Person is any party who has acted as your agent, employee, attorney, accountant, investment banker/broker, or real estate agent or broker within the two-year period ending on … Continue reading →

The general statutory requirements for an I.R.C Section 1031 tax-deferred exchange are as follows: Both the property surrendered and the property received must be held for productive sue in a trade or business, or for investment The property surrendered and … Continue reading →

A Safe Harbor is a "suggestion" from the IRS. They are not substantive rules, but to the degree that auditing agents understand them, they will be applied as "Holy Writ." The safe harbors to come out of the final I.R.C … Continue reading →

Not all property transferred or received in an exchange may be of like kind. Other property or money can be transferred in an exchange, without invalidating the entire exchange. Such non like-kind property is called "boot". In general, boot is … Continue reading →