North Central and the Expansion of Code Sec. 1031(f) Related-Party Exchange Rules
5 Pages Posted: 12 Jun 2015 Last revised: 24 May 2016
Date Written: June 10, 2015
In North Central Rental & Leasing, LLC v. United States, the Eighth Circuit held that an exchange that involved an equipment leasing company and its related-party equipment dealer did not qualify for Code Sec. 1031 nonrecognition. This is yet another example of courts denying Code Sec. 1031 nonrecognition to related-party exchanges. In this instance, however, the court appears to have expanded the related-party rules to extend beyond the scope envisioned by Congress. This Article examines the Eighth Circuit’s decision and illustrates how the holding extends Code Sec. 1031(f) beyond the bounds Congress intended.
Keywords: Section 1031 exchange, section 1031(f), related-party exchange, like-kind exchange, equipment exchange, program exchange
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