May 2006 1031 Exchange Newsletter

Home 1031 Exchange 1031 Podcasts Online Handbook Is Your Money Safe? Selecting Your Accommodator The Timeline Our Fee Schedule Newsletters August 14,2008 March 6, 2008 March, 2008 December, 2007 July 2007 November 2006 May 2006 April 2006 March 2006 January 2006 November 2005 October 2005 August 2005 June 2005 (2) June 2005 May 2005 April 2005 March 2005 February 2005 January 2005 December 2004 November 2004 October 2004 September 2004 August 2004 July 2004 June 2004 May 2004 April 2004 March 2004 February 2004 January 2004 FEA Code of Ethics and Conduct Office Directions Contact Us Classes & Presentations Links

IRS RULES –
TAXPAYERS MAY NOW ACQUIRE REPLACEMENT PROPERTY
FROM RELATED PARTIES!

The IRS informed us with Private Letter Ruling (PLR) 20040002 that a taxpayer could acquire replacement property from a related party if the related party is also doing an exchange. PLR 200616005 reaffirms this position. The Service ruled that taxpayer could sell relinquished property A to unrelated buyer through a Qualified Intermediary (QI), and acquire replacement property B from related party S corporation without violating the related party rules of § 1031(f)(4) IF the related party was also doing an exchange out of property B into other property.

The related party was thus not cashing out.

The taxpayer and related party represented that they both would hold their replacement property for at least two years. This is similar to a previous PLR 200440002, which reached the same result. In this new ruling, however, the taxpayer represented that it was trying to obtain additional replacement property from an unrelated seller, and the taxpayer would pay tax on the cash received if the taxpayer was unable to find additional replacement property. The Service ruled that this taxable boot would not blow the whole related party exchange.

SB&OH Exchange Accommodators continue to provide you with the most current updates on matters of importance to your practice.

Jeffrey P. Helsdon
Certified Exchange Specialist®

Home 1031 Exchange 1031 Podcasts Online Handbook Is Your Money Safe? Selecting Your Accommodator The Timeline Our Fee Schedule Newsletters August 14,2008 March 6, 2008 March, 2008 December, 2007 July 2007 November 2006 May 2006 April 2006 March 2006 January 2006 November 2005 October 2005 August 2005 June 2005 (2) June 2005 May 2005 April 2005 March 2005 February 2005 January 2005 December 2004 November 2004 October 2004 September 2004 August 2004 July 2004 June 2004 May 2004 April 2004 March 2004 February 2004 January 2004 FEA Code of Ethics and Conduct Office Directions Contact Us Classes & Presentations Links	IRS RULES – TAXPAYERS MAY NOW ACQUIRE REPLACEMENT PROPERTY FROM RELATED PARTIES! The IRS informed us with Private Letter Ruling (PLR) 20040002 that a taxpayer could acquire replacement property from a related party if the related party is also doing an exchange. PLR 200616005 reaffirms this position. The Service ruled that taxpayer could sell relinquished property A to unrelated buyer through a Qualified Intermediary (QI), and acquire replacement property B from related party S corporation without violating the related party rules of § 1031(f)(4) IF the related party was also doing an exchange out of property B into other property. The related party was thus not cashing out. The taxpayer and related party represented that they both would hold their replacement property for at least two years. This is similar to a previous PLR 200440002, which reached the same result. In this new ruling, however, the taxpayer represented that it was trying to obtain additional replacement property from an unrelated seller, and the taxpayer would pay tax on the cash received if the taxpayer was unable to find additional replacement property. The Service ruled that this taxable boot would not blow the whole related party exchange. © The Federation of Exchange Accommodators SB&OH Exchange Accommodators continue to provide you with the most current updates on matters of importance to your practice. Jeffrey P. Helsdon Certified Exchange Specialist®

	Olympic Exchange Accommodators, LLC 1401 Regents Blvd, Suite 102 \| \| Fircrest, WA 98464 Tacoma 253-512-1031 Toll Free 866-309-1031 Fax 253-414-3500 Email: jhelsdon@olympic1031.com ©2010. Olympic Exchange Accommodators, LLC (Copyright & Disclaimer) A member site of the nwRealty Network of Real Estate Brokers, Agents and Affiliates. Development, hosting and maintainance provided by nwRealty Internet Application Services.