The IRS is closing gaps and loopholes in its treatment of 1031 exchanges. 1031 exchanges are among the most closely scrutinized tax issues for auditors – they are widely used and frequently misused, with many investors running afoul of the rules. There is a particularly high audit rate for partnership 1031 transactions.
On today’s show, we’ll review the main reasons for most 1031 audits, and what to look out for under the new tax law.
The IRS carefully examines partnership 1031 exchanges, including assignment language in purchase contracts and how funds are secured to accommodate exchanges in the state. Failing to meet federal and state requirements can result in civil and/or criminal penalties.
Our guest today has over thirty years helping tens of thousands of clients with tax representation and resolving all types of tax situations that can arise with federal and state taxes.
You may also like: How To Do a 1031 Exchange: Rules and Definitions for Investors