Home      Login

Abstract: 

The exchange and like-kind property requirements provide that an exchanger must transfer property in exchange for other like-kind property to obtain Section 1031 nonrecognition treatment. If the exchanger receives cash from the sale of one property and uses it to acquire another piece of property, the transaction will not qualify for Section 1031 nonrecognition. Such transactions are merely sales followed by a purchase. Many exchanges are deferred exchanges (i.e., the exchanger disposes of the relinquished property and later acquires the replacement property) and multiparty exchanges and must be carefully structured to ensure that the exchanger does not receive cash. Because Treasury has provided safe harbors for structuring deferred exchanges, many of them can now be completed with assurance that they will satisfy the exchange and like-kind property requirements.

Keywords: 

Affiliations:  1: Washburn University School of Law.