Happy 10-31 Day from Asset Preservation!

FTB Notice 2019-05

Imposing the Failure to Withhold Penalty Against Qualified Intermediaries Who Actively Participate in Certain Improper Like-Kind Exchange Transactions

The purpose of this Notice is to inform qualified intermediaries (“QIs”) that the Franchise Tax Board (“FTB”) will impose failure to withhold penalties against QIs who actively participate in structures where boot or proceeds from an attempted like-kind exchange are converted into an installment note or similar arrangement in which payments are to be paid out over two or more years. These penalties may be imposed beginning with attempted like-kind exchanges in which property is relinquished on or after March 24, 2020. Read More »

Important Information for Investors Beginning an Exchange

From October 17 – December 31, 2019

Do Not File Your 2019 Income Tax Return Until Your Exchange Has Been Fully Completed.

The time frame you have to complete the acquisition of your replacement property ends at midnight on the earlier of the 180th day after the date you transferred the relinquished property OR the due date (including extensions) for your income tax return for the taxable year in which the transfer of the relinquished property occurs. (U.S. Treasury Regulations section 1.1031(k)-1(b)(2)).

This means if the 180th day following the closing of your first relinquished property falls after the due date for your 2019 tax return (this year, for individuals, April 17, 2020, you must file an application for extension of time with the IRS to extend the due date. If you do not file for an extension, you will NOT be able to acquire any replacement property in your exchange after your tax return due date.

REMEMBER:
If your exchange is not completed by the due date of your tax return —
FILE AN EXTENSION.

If you have any questions, please call your Exchange Counselor at

National Headquarters: 800.282.1031
Eastern Regional Office: 866.394.1031

How Housing Wealth Transferred From Families to Corporations

The Great Housing Reset has led to growing numbers of single-family homes shifting from owner-occupied housing to investment vehicles for large corporations. Read More »

From the closing on the sale of the relinquished property, an exchanger must: (1) properly identify potential replacement properties within 45 calendar days (the “Identification Period”) and; (2) close on the replacement property(ies) within 180 calendar days of the transfer of relinquished property sale (the “Exchange Period”). To access a calculator and determine your 45-day Identification Period and 180-day Exchange Period, click here…

Purchasing Replacement Property from a Builder

When a taxpayer considers purchasing new construction from a builder as replacement property in a 1031 exchange, they should be aware of many factors in advance of the contemplated 1031 exchange transaction…Read More »