Recent Rulings Provide Guidance for Improvement Exchanges on Exchanger-Owned Land
Written by admin on May 10th, 2011from the record, rather than to attempt to protect ‘the interests of all of the many taxing authorities’ by insisting that a characterization adopted for one tax be a determination for all taxes.” Ronald A. Morris and David E. Kahen, “The City’s Tax Appeals Tribunal Finds a ‘Conduit’ “, New York Law Journal, Aug. 25, 1999, p. 5, col. 2.
Conclusions
An improvement exchange has been, for quite some time, a very beneficial transaction for exchangers wishing to add value to a replacement property, or as a device to obtain custom improvements while taking advantage of a tax- deferred exchange.
The IRS appears to be opening the door a little wider, by potentially giving exchangers the additional benefit of completing the same type of exchange on property that they may already have an interest in. And while these Private Letter Rulings may signal an intent by the IRS to move in a positive direction, exchangers are reminded to seek competent tax and legal advice as this is a new area.
Todd R. Pajonas is President of Legal 1031 Exchange Services, a national Qualified Intermediary for IRC ยง1031 tax deferred exchanges.
Legal 1031 Exchange Services, Inc.
877/701-1031
todd@legal1031.com
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