1031 Real Property Exchange

What’s New with the IRS Tax Code and 1031 Exchanges?

Initially created in 1918, the U.S. Tax Code is a complex and ever evolving body of law.  With constant IRS pronouncements and occasional legislative amendments and additions, the Tax Code continues to expand and change with the times. 

Internal Revenue Code §1031 was enacted in an earlier form in 1921.  Slowly gaining in popularity, landmark tax court case Starker v. U.S. for the first time allowed property owners to engage in delayed exchanges by taking up to 180 days to acquire their replacement properties.  Previously, taxpayers were required to swap their properties directly with other taxpayers with no cash changing hands in order to avoid being taxed.

As a direct result of the (Starker) case, the U.S. Treasury Department enacted Treasury Regulations §1.1031(a)-1 through §1.1031(k)-1 in 1991.  These regulations provided taxpayers with a road map in which to navigate the previously murky waters of delayed exchanges. 

Every year, the IRS issues scores of private letter rulings, revenue procedures and other memorandum clarifying its position and providing taxpayers and their advisors with guidance on property exchanges.  In addition, tax courts issue rulings and both state and federal legislatures pass laws concerning tax-deferred exchanges. 

In this evolving environment, Starker Services, Inc. strives to provide the most recent rulings and laws which directly impact §1031 exchanges.  Please click on one of the PDF files below for the most recent tax changes.

 

FIVE YEAR HOLDING

Improvements to Property Already owned

Jobs and Growth Act of 2003

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STARKER SERVICES, INC