DuvallWheeler, LLP

 

2017 – 08/14

IRS disagrees that Sec. 1031 applies despite taxpayer pre-exchange use of obtained property. The IRS has announced in the Internal Revenue Bulletin its nonacquiescence with a U.S. Tax Court decision where a taxpayer used a third-party facilitator to assist with a Sec. 1031 like-kind exchange. The court found that the fact that the facilitator held the new property for 17 months during which the taxpayer had the benefits and burdens of ownership didn’t cause the entire transaction to be a nonqualifying “self-exchange” (exchanging property with itself).