Section Quick Links
Tax Reform and Section 1031: As of 11/14/17, the tax reform proposals of both the House of Representatives and the Senate contain a provision to eliminate Section 1031 exchanges of all assets other than real property, effective after 12/31/17. This may change as the legislative process continues. Let your U.S. representatives and senators know if you oppose changes to Section 1031.
The Republican controlled House and Senate, along with President Trump, Threaten to Eliminate or Substantially Reduce the Value of 1031 Exchanges: Take Action Now
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
May 2016: PLR 201622008 Rev. Rul. 2002-22 and Put Option. This is a private letter ruling under Rev. Proc. 2002-22, holding that an undivided fractional interest in real property Read full analysis
January 2016: ILM 201605017 Personal Use of Aircraft. The aircraft in this exchange was used both for business and personal use by the taxpayer. In this memorandum, the IRS Chief Counsel stated that the aircraft was considered one property for 1031 purposes, and the taxpayer must show that he used it primarily for business and investment purposes. 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.