X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON, DC-The IRS has issued a document outlining its position on so-called “reverse” deferred or Starker exchanges of property. The issue concerns how to structure certain exchanges of like-kind property while successfully deferring taxable gains.

Tax rules have required the exchange to be simultaneous or to identify and acquire replacement properties shortly afterwards. However, taxpayers have often found it necessary to acquire the replacement property before selling their current property–a “reverse” deferred exchange that was not addressed by tax rules. Taxpayers have often used third-party intermediaries to hold replacement properties in “parking transactions,” but this has not always satisfied tax regulators.

In the new rule, the IRS has outlined rules for structuring exchanges with such third-party intermediaries so as to preserve tax benefits. The rules do not answer all questions raised about Starker exchanges, and exchanges may be structured differently without losing the tax benefits, according to the consulting firm Arthur Andersen.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.