Surgent's Taking Advantage of Like-Kind Exchanges

Overview

When real property is sold for a gain, we always try to find ways to defer recognizing income so that it won't be necessary to send a check to Uncle Sam. There is a provision within the Internal Revenue Code that allows the taxpayer to defer recognition of immediate taxable gain in the year of sale known as a "like-kind exchange." Knowing how and when to utilize this provision makes the Accounting and Finance Professionals very valuable to either their client or the entity they work for. We will also discuss recent proposals that could impact the future of this provision.

Prerequisites

A basic knowledge of the provisions for recognizing gain or loss on the sale of real property

Objectives

• Utilize the provisions of IRC Sec 1031 in order to defer recognizing gain on the sale of real property via a like-kind exchange

Highlights

• Understanding the history of IRC Sec 1031
• Who does and does not qualify for utilizing the like-kind provisions
• Which properties do and do not qualify for like-kind exchanges
• The differences between a “dealer” and a “non-dealer” regarding like-kind exchanges
• How to complete a like-kind exchange
• The different types of like-kind exchanges
• The definition of “boot” and how it applies to like-kind exchanges
• Rules concerning Revenue Ruling 72-456, and
• The mechanics of Form 8824 and how to complete this form by performing a couple of case studies