Exchanges between related parties are allowed but the Exchanger must follow specific rules for the exchange to qualify for tax deferral.
Refinancing to pull equity out of a property prior to or after completing a tax deferred exchange can result in a taxable transaction under the “step transaction doctrine.”
The intent by the taxpayer to hold property “primarily for sale” will prevent the property from qualifying for IRC §1031 treatment.
Can I dissolve my entity right before the close of escrow?
Certain interests in real property, such as natural gas pipelines, may be exchangeable for a fee interest in real property.
Because of advantageous tax treatment combined with liability protection, limited liability companies (LLCs) have become a preferred way to own real estate in the United States.
The 1991 Treasury Regulations for tax deferred exchanges under IRC §1031 established four “safe harbors,” the use of which allow a taxpayer (Exchanger) to avoid actual or constructive receipt of money or other property for purposes of completing a §1031 exchange.