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
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