Bill Lentz <blentz[at]negatorygoodbuddy.prodigy.net> wrote:

- quote -

This is what happens when you do after-the-fact tax planning.
It is disqualified because he failed to use an intermediary
and the timing is wrong. For a few hundred shekels, he could
have gotten it right. But that happens to people who think
they can handle a complex tax-driven question by themselves.

Dick

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Bill Lentz <blentz[at]negatorygoodbuddy.prodigy.net> wrote:

- quote -

There are several requirements of section 1031 exchanges
that TP failed to comply with.

To begin with, the proceeds from the original sale must be
held by a qualified intermediary. Under section 1031, the
selled cannot receive ANY proceeds before certain other
conditions are met.

Second, the intermediary must be the party purchasing the
replacement property.

Third, section 1031 has certain time requirements for
identifying and closing on the replacement property. TP has
not complied with these requirements.

So, no, this is NOT a like kind exchange and he must report
the sale and pay any tax due on the gain.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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ill Lentz <ble...[at]negatorygoodbuddy.prodigy.net> wrote:

- quote -

Nope. Having control of the proceeds of the sale of the old
land is the fatal flaw.

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Would this transaction qualify as a like kind exchange? If
not, what part or parts of the transaction disqualifies it.

TP owns land out of state, which he purchased 5 years ago
while a resident of that state. Land is held for
investment.

TP purchases land in March 2006 in current state of
residence, borrowing funds from a bank in order to purchase.

TP sells out of state land in October '06 and uses proceeds
to pay off mortgage. TP asserts this is a like kind
exchange since both pieces of land are held for investment.

Thanks

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >