Like-Kind Exchanges: Qualify as a Valid Section 1031 Exchange
Author: Jennifer Kowal
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2026 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
Like-kind exchanges, that is exchanges of property used for business or held as an investment solely for other business or investment property that is the same type or “like-kind", have long been permitted under the Internal Revenue Code. Generally, if the exchange meets the requirements of I.R.C. section 1031, the taxpayer will not be required to recognize a gain or loss. If, as part of the exchange, the taxpayer also receives other (not like-kind) property or money, it must recognize a gain to the extent of the other property and money received, but can never recognize a loss. Under the Tax Cuts and Jobs Act, Section 1031 now applies only to exchanges of real property and not to exchanges of personal or intangible property.
This course will provide instruction on the requirements to qualify as a valid Section 1031 exchange, including how to calculate any gain when boot or debt is involved in the exchange. It will also cover basis consequences of section 1031 exchanges and the Treasury Regulations allowing deferred exchanges.
Publication Date: September 2023
Designed For
Tax practitioners of all levels who provide advice and return preparation involving like-kind exchanges.
Topics Covered
- Basic Requirements of Section 1031
- Deferred Exchanges
- Related Party Exchanges
- Boot and Gain and Effects of Debt
Learning Objectives
- Describe the rules for qualifying an exchange as a like-kind exchange and the definition of "like-kind"
- Recognize the effects of debt and boot on non-recognition, and how to calculate gain in context of a section 1031 exchange
- Describe the use of qualified intermediary or escrow agent for deferred exchange
- Recognize how to calculate basis of replacement property acquired in like-kind exchange
- Identify current developments in like-kind exchanges
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
