Every state in the union – other than Pennsylvania – conformed its tax code to the IRS code to permit residents to take advantage of tax-deferred exchanges under state tax law. Now, finally, Pennsylvania has changed its law to recognize tax-deferred exchanges that comply with federal law. Previously, Pennsylvania residents deferring gains under federal law
Even the most attentive taxpayer can invalidate a 1031 exchange by — unintentionally — violating the “same taxpayer” rule. While simple in concept, a few examples show how mistakes can be made. Let’s start with the basic rule first. The “taxpayer” looking to defer recognition of taxes using an exchange must be the “same” both
A 1031 exchange is a powerful vehicle to build wealth by permitting taxpayers to defer capital gains, and depreciation recapture, through a properly executed transaction. But the rules governing exchanges are a “safe harbor,” meaning that the failure to comply exactly with these technical rules will violate the exchange and force the taxpayer to recognize
Section 1031 which permits deferral of gains for the sale and subsequent acquisition of a “like kind” property is a powerful tax device for savvy investors. But the rules governing exchanges are a “safe harbor,” meaning that the failure to comply exactly with these technical rules will violate the exchange and force the taxpayer to
The sale of commercial and other real estate held for business, trade or investment triggers significant tax consequences that the careful taxpayer must understand in order to make prudent decisions. A properly structured 1031 Exchange permits the seller to defer gains on the sale by purchasing another, qualifying property. The rules for 1031 Exchanges are
