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IRS Alerts On 1031 Exchanges
Strategic 1031 Exchange Advisors provides expert consulting services which includes information on IRS rulings and revisions concerning all types of 1031 Exchanges. Please check back often for information that can help you to avoid costly mistakes, and to get the most from your 1031 Exchange.
Revenue Procedure No. 2008-16 (Rev. Proc. 2008-16)
Safe Harbor for Like-Kind Exchange of Dwelling Unit
This revenue procedure provides a safe harbor under which the Internal Revenue Service will not challenge whether a dwelling unit qualifies as property held for productive use in a trade or business or for investment for purposes of Section 1031 of the Internal Revenue Code. Please click here to find out more about this revenue procedure.
IRS Issues Fact Sheet No. 2008-18 (IRS FS-2008-18)
Helps Taxpayers Better Understand How to Complete a 1031 Exchange
The Internal Revenue Service has released a Fact Sheet (FS-2008-18) on Like Kind Exchanges Under IRC Code Section 1031. This is the first time that the IRS has actually issued a Fact Sheet on 1031 exchanges and it is designed to assist taxpayers in understanding how to properly structure and successfully complete a 1031 exchange.
IRS Fact Sheet No. FS-2008-16 was produced and released by the IRS as a direct result of a report issued back in September 2007 by the Treasury Inspector General reporting and filing for like-kind exchanges, and for poorly defining when a 1031 exchange of vacation property and/or second homes would qualify for tax-deferred exchange treatment under Section 1031 of the Internal Revenue Code. Click here to read more detail.
IRS Issues Advice: Taxpayer May Engage in a Reverse Exchange and a Forward Exchange Using Same Relinquished Property
Although a commonly accepted practice within the industry for many years, the IRS has formally granted its approval for taxpayers to start a reverse 1031 exchange and end with a forward 1031 exchange using the same relinquished property. The taxpayer can utilize an AT to park a potential replacement property, then sell relinquished property and then subsequently acquire a second replacement property on the back leg of the transaction. Click here to read more detail.