Concepts and Mechanics of Exchanges ON DEMAND

Overview

While tax reform provisions have changed the tax on profits realized from the disposition of real estate, investors still seek escape hatches from the capital gain tax. Tax-deferred exchanges permit the disposition of property often with the taxpayer receiving significant cash but without the payment of any tax. Functionally, an exchange is a bridge over the normally taxable event of moving from one property to another. This course alerts the practitioner to the different planning opportunities that surround exchanging. Participants will be able to identify, analyze and handle effectively the complex tax problems that arise under 1031. This understanding will be directly applied to the structuring and audit survival of multi-party and delayed exchanges.

Highlights

Introduction - Section 1031. Section 1031 and its function. Statutory requirements and definitions. The concept of “boot. “ The rules of “boot. “ Losses. Basis on tax-deferred exchange. Depreciation, cost recovery, MACRS, and recapture. Miscellaneous aspects. Mechanics. Types of exchanges. Delayed exchanges. Warehousing and pot method. Accommodators and intermediaries.

Prerequisites

None.

Designed For

This program is appropriate for professionals at all organizational levels.

Objectives

Identify factors that determine the popularity of exchanging, specify tax law changes influencing exchange popularity noting the impact of current capital gains rates, recognize the capital gain rate “baskets” and determine the tax treatment of assets in each category. Specify instances where the IRS may assert an unintended Mandatory application of Section 1031. Specify the elements Section 1031 noting how these elements conceptually differentiate a like-kind exchange from a sale. Identify “boot” and like-kind property noting boot’s potential impact on nonrecognition and list several examples of boot. Determine mortgage boot and property boot identifying whether a taxpayer has given or received boot in an exchange noting the related tax consequences. Identify the categories of property received in an exchange into noting which category is permitted to recognize loss, recognize how avoiding Section 1031 can allow clients to potentially increase recognizable losses, and determine the tax treatment of non-recognized losses under Section 1031, and much more!