Like Kind Exchanges
Author: Allison McLeod
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Join Allison McLeod, CPA, LL.M for a discussion on like-kind exchanges (LKE), known as one of the last great tax legal “shelters” available to those buying and selling real property. We will be covering the basic structure of a LKE, and ways a taxpayer can utilize qualified third party intermediaries (QI), tenancy-in-common structures including Delaware Statutory Trusts (DST). We will also explore creative solutions to sticky situations a taxpayer may find itself in obtaining replacement property. This course is ideal for CPAs, EAs, lawyers, real estate professionals, accountants or other tax professionals.
Publication Date: June 2021
Topics Covered
- General Rule: Sale or Exchange
- Some Exceptions to Gain Recognition
- IRC Sec. 1031(a)(1)
- Examples of Like”Kind Property
- Property That Is Not Like”Kind
- Advantages of a LKE
- Disadvantages of LKEs
- Parties to the Exchange
- Glossary of Terms
- Types of Like Kind Exchanges
- Direct Exchange Example
- Direct Like”Kind Exchange
- Basic Three Party Exchange
- During the Exchange
- Receipt of Boot During Trade Down
- Three Party Exchange with Boot and Trade Down
- Basis of Like”Kind Property Received
- Requirements for a Deferred (Non”simultaneous Exchange)
- Requirements for Identification of RP
- New Construction as Replacement Property
- Forward and Reverse Deferred Exchanges
- Requirements for the EAT
- Forward Exchange — RQ Parked
- Reverse Exchange ” New Construction as RP
- Forward and reverse combo exchange
- Delaware Statutory Trusts ("DSTs)
- Features of a DST
- Stories from the trenches
- Related Party Issues
- Exchanges Between Related Parties
- Other Issues
- Vacation Homes as LKE
Learning Objectives
- Differentiate whether a LKE can be used to defer taxes upon the sale of real property
- Recognize when it is appropriate to use a QI in effecting a LKE
- Describe a DST and how it can be used in obtaining replacement property on a timely basis
- Identify ways to appropriately use the LKE structure in unusual situations
- Describe a gain or loss that must be recognized when there is a sale or exchange of property
- Differentiate IRC Sections and how they apply
- Recognize correct statements with respect to like-kind exchanges
- Describe which property may qualify for like-kind exchange treatment
- Identify a requirement related to identification of replacement property
- Recognize correct statements with respect to vacation homes as a like-kind exchange
- Describe examples of qualifying like-kind property
- Identify advantages and disadvantages of a like-kind exchange
- Identify the taxpayer's cost of relinquished property plus capital improvements minus depreciation
- Identify requirements in a deferred/non-simultaneous exchange
- Describe the maximum number of replacement properties that can be identified
- Describe a Delaware Statutory Trust
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
