Congress and the IRS should not alter the present like-kind exchange rules. Proposals to revise or restrict like-kind exchanges may have a significantly harmful effect on the value and trading of property.
Section 1031 of the Internal Revenue Code allows owners of commercial real estate to exchange properties without setting off a taxable event. Such tax-deferred exchanges enable an orderly flow of property ownership. Congress and the Internal Revenue Service (IRS) are reviewing several aspects of like-kind exchanges as well as developments in the tenant-in-common marketplace.
Recent IRS Guidance
The Internal Revenue Service has issued Revenue Procedure 2010-14, which provides taxpayers with guidance in situations in which a 1031 Exchange has failed due to the collapse or failure of the transaction’s Qualified Intermediary (QI).