Section Quick Links
Tax Reform and Section 1031: Section 1031 for real property was preserved under the 2017 Tax Reform Bill. However, as of 1/1/18, non real property assets are not eligible for tax deferral under Section 1031. For depreciable personal property, such as equipment or aircraft, 100% bonus depreciation has somewhat replaced Section 1031. There is no similar provision for intangibles or collectibles and art.
PLR 201834010: Exceptions to the Two Year Holding Period for Related Party Exchanges. In this private letter ruling, the IRS allowed the taxpayer to exchange one replacement property and contribute another to a tax partnership within the two year period following a related party swap. PLR 201834010.
August 2016: Bartell v. C.I.R. Tax Court Approves Non Safe Harbor Reverse Exchange. In this Tax Court decision, a 17 month reverse construction exchange using an exchange facilitator. The IRS issued a non-acquiescence to the decision in August 2017. Read full analysis
IRS Disaster Tax Relief:
Revenue Procedure 2007-56, Section 17, provides an extension to the 45 and 180 day exchange deadlines in certain circumstances, including federally declared disasters. The extension is for the longer of the extension date listed in the IRS notice, or 120 days after the applicable exchange deadline. (But a deadline cannot be extended beyond the due date, including extensions, of the tax return for the year of disposition of the relinquished property). Generally, the taxpayer must be located in one of the designated counties, regardless of where the relinquished property or replacement property is located, or the taxpayer must otherwise have difficulty meeting the exchange deadlines under the conditions in Revenue Procedure 2007-56, Section 17. Also, the relinquished property must have been transferred, or a property must have been acquired by the EAT in a reverse exchange under Revenue Procedure 2000-37, on or before the declared disaster date.
For the most up-to-date information on IRS granted tax relief in disaster situations, please refer to the IRS website.