Webinar Review: 1031 Tax-deferred Exchanges

F is correct because all of the above is correct. A related party for purposes of a 1031 tax-deferred exchange includes relatives, and anyone who within a two year period prior to the exchange has acted as your attorney, accountant, real estate broker, or agent. Related parties also include any person who owns 50% or more interest of a corporation or partnership that is involved in a tax-deferred exchange.

C is the correct answer because a taxpayer who owns a vacation home must first meet the personal use requirements in order to sell their property in a tax-deferred exchange. If they meet the personal use requirements they must also own the relinquished property for at least 24 months and own the replacement property for at least 24 months.

B is the correct answer because only the Dodd-Frank Wall Street Reform and Consumer Protection Act regulates Qualified Intermediaries. Title X of the bill specifically regulates QI’s.

C is the correct answer because once the relinquished property is transferred the taxpayer has only 45 calendar days to identify a replacement property. The taxpayer has 180 calendar days to close on the replacement property. There are no regulations for 60 or 90 days in a 1031 tax-deferred exchange.

D is the correct answer because property transferred between related parties in a tax-deferred exchange must be held for at least 2 years by both parties. If either party sells the replacement property before the 2 year period, the tax-deferred exchange is disqualified for both parties.

C is the correct answer because only Rev. Proc. 2008-16 allows for a vacation property to be exchanged in a 1031 tax-deferred exchange.