Information on tax deferred exchanges

Real Estate Agent with Davis Yoder Group, Coldwell Banker Realty BRE# 01117410, 00705038

Here is some information on tax deferred exchanges. If you require more please contact us or our preferred provider Asset Preservation at

IRS Scrutiny into 1031 Exchanges...

If you are considering conducting a 1031 Exchange, make sure you work with Asset Exchange Company to ensure it is done right.

The IRS is planning on increasing audits and enforcement of 1031 Exchanges by summer of 2008. 

In a report issued last month, the Treasure inspector general for tax administration wrote: "There appears to be little IRS oversight of the capital gains (or losses) deferred through like-kind exchanges."  The inspector general made three specific recommendations, all of which have been accepted by the IRS: 

1. The IRS should study tax reporting and compliance issues involved with like-kind exchanges. The IRS agreed to conduct research and complete the work by Aug. 15, 2008. Based on the outcome of this research, it appears likely that exchanges that take place this year will receive greater scrutiny.

2. The IRS should provide better information and guidance to taxpayers on how to conduct a proper 1031 exchange. The IRS has agreed that by Jan. 15, 2008, it will provide more information on a number of publications and forms to help taxpayers understand how the exchange process works. Specifically, Publication 17 ("Your Federal Income Tax") will be updated to specifically remind taxpayers that they must file Form 8824 with their returns if they have been involved in 1031 exchanges in the previous year.

3. The IRS must provide clear guidance to taxpayers on the rules and regulations of like-kind exchanges with respect to second homes that were not used exclusively by owners.

The integrity of your exchange is going to be increasingly important, so don’t trust your exchange with anyone but Asset Exchange Company.  Remember, when you work with Asset Exchange Company your transaction is handled by a CPA and Attorney who specializes in Section 1031 of the tax code.


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Bill Exeter
Exeter 1031 Exchange Services, LLC - San Diego, CA
1031 Tax-Deferred Exchange Expert

Hi Bob,

Glad that you saw the audit report.  I think we can clearly expect more oversight, including audits of like kind exchange transactions.

The California Franchise Tax Board (FTB) put like kind exchanges on thier top audit issues list in December 2005, so we know the State of California will be looking at like kind exchanges closer as well.

It is not really anything to worry about unless you are pushing the envelope. 

Dec 07, 2007 12:41 PM #1
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