The use of property does not bar gain nonrecognition

Article Abstract:

The required recognition of gain realized on the exchange of home offices, owner-occupied apartment buildings, working farms with farmhouses, or other types of dual-use property can be deferred under Sections 1031 and 1034. The first section allows deferment of gain or loss recognition when property used for a trade or business or for investment is exchanged for property used similarly. The second section requires that the gain arising from the sale or exchange of the taxpayer's principal residence be rolled over into the latest new principal residential property that was acquired and lived in taxpayer for the duration of the four-year replacement period. Taxpayers can use Secs. 1031 and 1034 concurrently or in succession to delay gain recognition.

Real property exchanges, Like-kind exchanges

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Nonrecognition denied for exchange with mother

Article Abstract:

The IRS has ruled that a nonrecognition treatment of an exchange of investment property made between relatives is a violation of Section 1031's related-party provisions even if the transaction was conducted through a qualified intermediary. In TAM 9748006, a taxpayer made a four-party exchange of property involving himself, his mother, a third party and an intermediary. The transactions resulted to the taxpayer's acquisition of an investment property. The third party ended up with an unimproved property while the taxpayer's mother, the original owner of the investment property, ended up with cash. IRS held that the exchange was designed to avoid the related-party provisions of the Tax Code.

Cases, United States. Internal Revenue Service, Related party transactions

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Prop. regs. ease meeting reorganization continuity rules

Article Abstract:

The authors discuss favorable IRS proposed regulations under IRC 368 which provide rules concerning continuity of shareholder interest and continuity of business enterprise for purposes of obtaining tax-free treatment of corporate reorganizations. The application of the regulations to post-transaction events is the focus of the article.

United States, Corporate reorganizations

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