Twenty Things Real Estate Attorneys Can Do to Not Mess Up a Section 1031 Exchange (Part I: Items 1-10)
The Practical Lawyer, Vol. 34, p. 15, (May 2020)
10 Pages Posted: 8 Jun 2020
Date Written: June 5, 2020
Section 1031 exchanges are ubiquitous, but, all too often, foot faults by attorneys working on real estate transactions deprive exchangers of the tax benefits that they seek or would pursue with the right guidance. This two-part article discusses 20 things that real estate attorneys, who are on the front lines of real estate transactions, can do to help their clients qualify for the tax benefits of section 1031 . This Part I of the article covers the following 10 items:
Item 1: Notify your client if property being sold could qualify for section 1031 treatment.
Item 2: Remember that reverse exchanges may be an option.
Item 3: Leasehold improvements are great for the circumstances.
Item 4: Understand the (g)(6) restrictions and explain them to your client.
Item 5: Know the QI industry.
Item 6: Avoid accommodating accommodators.
Item 7: Know the identification rules.
Item 8: Know the identification deadline.
Item 9: Use caution when deferring gain by straddling taxable years.
Item 10: Consider whether proceeds from blown exchanges may be investable in qualified opportunity funds.
Part II of the article is in production and will cover 10 other items that real estate attorneys should be aware of when assisting with real estate transactions that may qualify for section 1031 treatment.
Keywords: section 1031, qualified intermediary, like-kind exchange
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