Concepts and Mechanics of Exchanges

Course Description:

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.

Learning Objectives:

Upon successful completion of this course, participants will be able to:

·         Balance multiple party exchanges using the in and out test determining net boot.

·         Divide property received in an exchange into two basic types.

·         Analyze the like-kind requirement as it impacts real estate and personal property exchanges.

·         Distinguish delayed exchanges from delayed closes particularly as to simultaneity.

·         Apply the requirements of the final regulations for delayed exchanges.

·         Determine whether a taxpayer is in actual or constructive receipt of money by clarifying the four harbors that can be used without risk of actual and constructive receipt.