James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comKey Contacts
Back
Section 1031 Exchanges
Section 1031 or like-kind exchanges have become commonplace and most accountants have one or more individual income tax returns where an exchange is reported. There are however an increasing number of taxpayers who believe they can prepare their personal or business entity returns. While this is not the norm, it prove fatal to the success of an exchange if one is not careful. Consider the following regulation.
Treasury regulation for Section 1031 exchanges
Treasury Reg. § 1.1031(k)-1(b) (ii) – provides as follows:
(ii) The exchange period begins on the date the taxpayer transfers the relinquished property and ends at midnight on the earlier of the 180th day thereafter or the due date (including extensions) for the taxpayer’s return of the tax for the taxable year, in which the transfer of the relinquished property occurs.
What does this mean?
This means that you have 180 days after closing your relinquished property to complete your exchange unless your tax filing deadline (April 15th for most taxpayers) occurs first. In that case, exchange period will expire on April 15th UNLESS you extend the deadline for filing your income tax return. That is, you reduce your 180 day period unless you file an extension. An exchange beginning with a sale of relinquished property on December 1st must be completed by April 15th of the following year, a period of only 146 days unless the taxpayer extends his or her return.
Most readers will argue that most returns are extended because so much information is unavailable by April 15th and the problem will not arise. Perhaps, but we see more individuals seizing control of their filings relying on software as a substitute for professionals.
- Practices: Tax and Trusts & Estates
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
BESS Safety and Emergency Response: Legal Issues for Developers and Property Owners
As battery energy storage system (BESS) projects move from planning to construction, developers and property owners must address an issue that extends well beyond zoning approvals and interconnection agreements: what happens when something goes wrong? To avoid unforeseen liability, developers should address fire code compliance, emergency response planning, contractual risk allocation, and environmental liability before […]
Author: Nicholas Wall
Rule 26 Expert Discovery: When an Expert Witness Uses AI, Is It Discoverable?
Case law following the 2010 amendments to Federal Rule of Civil Procedure 26 offers guidance on how courts are likely to address whether an expert witness’s AI records are subject to discovery. Key Takeaways Rule 26 Expert Discovery After the 2010 Amendments This article addresses the question courts and lawyers have faced in recent cases: […]
Author: Chris Seelinger
How Expert Witness AI Use Ends Up in Discovery
“Show how 3M is 0% at fault.” The absurd tale of how a 350-page ChatGPT history for 3M’s expert witness was produced during a deposition is more likely than you think. It’s an inevitable trend, and an unsettled question for federal courts as experts make generative AI part of their workflow. Key Takeaways Expert Witness […]
Author: Chris Seelinger
The Screenshot Problem: Why Nothing Is Really Private Anymore
Screenshots have changed the risks of electronic communications. The screenshot problem is that messages intended for one person or a small group can be copied, forwarded, preserved, and ultimately presented to opposing counsel, regulators, journalists, customers, or a jury. Businesses should recognize that a truly private digital conversation is increasingly unreliable and ensure their policies, […]
Author: Sean M. Pena
BESS Project Agreements: Allocating Risk Among Developers, EPC Contractors, and Equipment Suppliers
Developers, engineering, procurement, and construction (EPC) contractors, and equipment suppliers each play a critical role in completing a BESS project. However, when equipment costs rise, deliveries are delayed, or regulations change, determining who bears the financial consequences can become contentious. Well-drafted project agreements are essential to sound risk allocation. Key Takeaways This article is Part […]
Author: Nicholas Wall
IP Infringement: What Steps Can You Take If You're Affected?
IP infringement occurs when someone uses your intellectual property without your permission or beyond the scope of the permission you granted. Common examples of IP infringement include copying a product’s patented features or using a trademarked logo in a way that is likely to confuse consumers about the source or affiliation of goods or services. […]
Author: Michael Mietlicki
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.