On May 22, 2008, Congress enacted the Food, Conservation and Energy Act of 2008 which is often referred to as the Farm Bill. Among other things, the Act amends IRC Section 1031(a)(2)(B) to exclude mutual ditch, reservoir or irrigation company stock from the definition of "stock." As a result, mutual ditch, reservoir or irrigation company stock should now be eligible in §1031 exchanges. In order to qualify for this treatment, the new law requires that ditch stock must be treated as an interest in real property under the law of the state in … (3 comments)
like kind property: 1031 Exchanges - Don't Miss These Posts On Development Rights
- 05/05/08 09:07 AM
Exchanging Development Rights I posted these during a low traffic period this morning. I've been checking on the stats and it looks like they were largely missed. Click here for Post 1 of 2 "Definition of Development Rights" and click here for Post 2 of 2 for the "IRS's Analysis of Transferable Development Rights." If you are working with clients who own large tracts of land, these posts will be very helpful for you. Lisa A. Lambert, Esq. 877.646.1031 or LisaL@apiexchange.com Asset Preservation, Inc. 800.282.1031 or info@apiexchange.com or www.apiexchange.com
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like kind property: 1031 Exchanges - Development Rights - Post 2 of 2
- 05/05/08 06:19 AM
How the IRS Analyzes Whether Transferable Development Rights are Like-Kind In my previous Post 1 of 2 that addressed the definition of Transferable Development Rights ("TDR") we saw that the IRS, in a PLR* determined that they were like-kind to a fee simple. Below, we will look at the analysis and reasoning the IRS applied in coming to that conclusion. Does the State Consider TDR to be Real Property? In determining whether the TDRs constituted an interest in real property, the IRS noted that certain tax statutes in the state in which the TDRs were located treated TDRs as real property. "Although it is unclear … (2 comments)
like kind property: 1031 Exchanges - Development Rights - Post 1 of 2
- 05/05/08 06:04 AM
Several weeks ago in my blog I discussed different types of property that may or may not qualify as like-kind including leaseholds, oil, gas and mineral rights, water rights, REITS and Timeshares, and easements. In this post we will examine the definition of development rights and in Post 2 we will examine the IRS's analysis of development rights and how they may qualify as like-kind to real property. Definition of Development Right A "Development Right" is defined as an unused right to develop a property to the extent permitted under state or local law. As states and municipalities have acted to restrict and regulate … (4 comments)
like kind property: 1031 Exchanges - Lending's Role In An Exchange
- 05/01/08 04:44 AM
DON'T GET KICKED BY THE UGLY BOOT Section 1031's purpose is to permit taxpayers to defer the capital gain on the sale of appreciated investment property as long as its rules are followed. One of the primary rules is that the sale property must be exchanged for property of like kind (held for productive use in a trade or business or for investment). Non like-kind property is called "Boot." There are two kinds of boot, "Cash Boot" and "Mortgage" boot. Cash is personal property and is therefore called Cash Boot. When the taxpayer receives some of the cash in an exchange it is … (2 comments)
like kind property: 1031 Exchanges - Are You Sure? Post #1
- 04/02/08 06:09 AM
Are You Sure You Understand 1031 Exchanges? Commonly Misunderstood Issues in Real Property 1031 Exchanges* 1. Like-Kind Property MYTH: In order for replacement property to be considered like-kind it must be exactly the same type of property as the relinquished property i.e. commercial for commercial, condo for condo, duplex for duplex, bare land for bare land. TRUTH: The definition of like-kind property under section 1031 is "property held for productive use in a trade or business or for investment." It depends on the INTENT of the taxpayer. THEREFORE: If the relinquished property was held for productive use or for investment, the replacement property can be … (2 comments)
like kind property: 1031 Exchanges -- Post #2 IRC Section 1031 - THE CODE EXPLAINED
- 03/13/08 12:22 PM
In the last post we actually reviewed the text of IRC Section 1031. In this post we will look at what the provisions of the section mean. We will be looking at the title line first. Remember, this is for educational purposes only. Any specific circumstances regarding an individual exchange should be reviewed by the taxpayer's tax advisor to ensure compliance with the provisions of Section 1031. THE CODE EXPLAINED (a) "Nonrecognition of Gain or Loss from Exchange Solely in Kind." This is the topic of the section. You will hear tax and legal advisors refer to property and whether it qualifies for … (0 comments)
Discussing 1031 Exchange Issues and Related Real Estate Issues in California. Specifically focusing on the Merced, Madera, Fresno, Selma, Reedley, Oakhurst,Visalia, Hanford, Porterville and Bakersfield areas.
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