1031 Exchanges Coming Under New Scrutiny
IRS cracks down on 1031 abuse.
Taxpayers aren’t exactly adhering to the Boy Scout honor code when they use 1031 exchanges to defer capital gains taxes, government watchdogs say. So expect more spot checks and audits by the Internal Revenue Service if you’re using the popular technique to defer capital gains taxes on land or other business property.
In September, the IRS agreed to step up oversight of like-kind exchanges after a report by the Government Accountability Office criticized the agency’s handling of the issue. In a report acquired by DTN, Kathy Petronchak, an IRS commissioner, said the agency would take corrective actions, including conducting a study of compliance and revising taxpayer instructions for 1031 property.
Copy of the IRS announcement (PDF).
Via Real Estate Bloggers.
