Section 1031 Exchanges: Qualification and Tax Reporting
Author: James R. Hamill
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Section 1031 provides an opportunity to defer gains realized from the sale of real property by investing in qualifying replacement property. Exchanges are subject to specific reporting and computational requirements.
It is unusual for an exchange to be between two parties. For this reason the regulations allow a facilitator, called a “qualified intermediary” to be part of an exchange. QI-facilitated exchanges typically involve four parties and must be carried out pursuant to requirements spelled out in the statute and the regulations.
In this two-hour CPE course, nationally recognized tax expert and instructor James Hamill, CPA, Ph.D. will explain why and how to complete a like-kind exchange. This will include a discussion of multi-party deferred exchange structures and less common “parking” arrangements. You will learn the mechanics and the reporting obligations of a QI-facilitated exchange to assist clients in satisfying the complex regulations. The course will also discuss computations of realized and recognized gains, and basis of replacement property.
Publication Date: February 2023
Designed For
CPAs, EAs, tax preparers and other tax professionals with responsibility for preparation of a variety of tax return types that may include like-kind exchange qualification and reporting.
Topics Covered
- Benefits of like-kind exchanges
- Detriments of like-kind exchanges
- Effect of debt on relinquished and replacement properties
- Receipt of "boot" and how to measure recognized gain
- Determining basis in replacement property
- Requirements for identification and receipt of replacement property
- Special tax issues that may need to be addressed
Learning Objectives
- Recognize and apply the requirements to support a tax-deferred exchange
- Identify key issues that must be reviewed for qualification
- Determine the documentation to maintain and the reporting obligations of an exchange
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
