1031 Exchange Fundamentals

Agenda / Content Covered

1. 1031 Basics
   10:00 - 11:00, Dal Houston
   1. History and Current Version of Section 1031
   2. Rationale - What is the Idea Behind §1031
   3. What is "Like-Kind" Property Under the New Version of Section 1031
   4. How do State Law Determinations Impact What is Considered to be Real Property (1245/1250)
   5. Foreign Real Property Exchanges
   6. Issues With Property You Use for Personal Purposes, Such as Vacation Properties
   7. Issues With Dealer Property, Stock in Trade or Other Property Held Primarily for Sale, Such as Inventories, Raw Materials, and Real Estate Held by Dealers
   8. The Same Taxpayer Requirement
   9. Using "Disregarded" Entities
2. Accounting Requirements
   11:00 - 11:45, Joseph C. Mandarino
   1. Napkin Test
   2. Partial Exchanges
   3. Receipt Money or Non Like-Kind Property ("Boot") in an Exchange
   4. Cash Boot E. Mortgage Boot
   5. (G)(6) Limitation
   6. Dealing With Closing Costs Expenses
   7. Dealing With Seller-Back Financing
3. Mechanics of 1031 Exchanges
   12:00 - 12:45, Joseph C. Mandarino
   1. Qualified Intermediary Safe Harbor
   2. Disqualified Persons That Cannot Act as the QI
   3. Selecting a Qualified Intermediary - Your Due Diligence and the Questions You Must Ask Before Entrusting Them With Your Client's Money
   4. Safe Harbor for Qualified Escrow Accounts
   5. Rules for Identification of Replacement Property
   6. Essential Requirements for Proper Identification (to be Built or Produced)
   7. How Can You Construct Improvements on Property That You Own?
   8. Bloomington Coca Cola Bottling Co.
   9. IRS Tax Reporting - IRS Form 8824
   10. Who Gets the IRS 1099S?
4. Reverse Exchanges
   12:45 - 1:45, Mark D. Kimball
   1. Parking Arrangements Rev. Proc. 2000-37
   2. BACK LEG - Parking the Replacement Property
   3. FRONT LEG - Parking the Relinquished Property
   4. Dealing With Deed Tax and Transfer Tax
   5. What are the Identification Requirements in a Reverse Exchange
   6. OVERLAPPING SAFE HARBOR - Reverse and Forward Exchanges in the Same Series of Transactions
   7. Issues With Financing the Acquisition of Replacement Property by EAT Construction/Improvement Exchanges
   8. Construction - Build-to-Suit Exchanges
5. Partnership and Tenant-in-Common Transactions
   2:15 - 3:00, Michael C. Walch
   1. What is a Partnership for Federal Tax Purposes
   2. Special Concerns When an Exchanger is Pooling His or Her Exchange Funds With Another Buyer
   3. "TIC" Tenants-in-Common Arrangements
   4. Tenants-in-Common Risks
   5. Syndicated Properties Sold as Tenants-in-Common Interests/Rev. Proc. 2002-22
   6. Delaware Statutory Trusts
6. Problems and Examples
   3:00 - 3:45, Michael C. Walch
   1. Partnership Split-Up Issues
   2. Drop and Swap Transactions
   3. Installment Sales
   4. Mixed Use Properties
   5. Pre/Post-Exchange Refinancing
   6. Interplay Between 1031 and the Principal Residence Exclusion Under IRC §21
   7. Problems-Related Party
   8. Replacement Properties in the U.S. Virgin Islands
7. Ethics Questions
   4:00 - 5:00, Mark D. Kimball
   1. Ethics Question # 1 - Due on Sale
   2. Ethics Question # 2 - May an Attorney Act as a Qualified Intermediary
   3. Ethics Question # 3 - May an Attorney Have More Than a 10% Interest in a Qualified Intermediary
   4. Ethics Question # 4 - Use of Exculpatory Language in the Exchange Agreement
   5. Ethics Question # 5 - What Reasonable and Prudent Steps Should an Attorney Take to Safeguard the Client's Funds Held by a Qualified Intermediary
   6. Ethics Question # 6 - Drafting Considerations in 1031 Exchanges
   7. Ethics Question # 7- Disclosing Environmental Contaminate
   8. Ethics Question # 8 - What to do if all of the Identified Replacement Properties Have Been Sold
   9. Ethics Question # 9 - Back-Dating Documents
   10. Ethics Question # 10 - Entering into a Reverse Exchange Agreement After the Parked Property Has Closed

Accreditation Details:

Dal Houston is a managing member with Benson & Houston PLLC, in Alva, Oklahoma, where he practices in the areas of like-kind exchanges, estate planning, real estate transactions, and oil and gas. He is a member of the Oklahoma Bar Association. Mr. Houston speaks at numerous continuing legal education programs on like-kind exchanges, business entities, and estate planning. He earned his B.S. degree from Oklahoma State University and his J.D. degree from University of Oklahoma College of Law.

Mark D Kimball is the founding shareholder of MDK Law, a firm emphasizing corporate, commercial, and property law and consulting in matters involving federal and international taxation. Mr. Kimball is admitted to practice in Washington, New York and Texas. He is an adjunct professor of law at Eotvos Lorand and Masaryk universities in Europe and has served as a law school guest lecturer at Seattle University School of Law. Mr. Kimball is also engaged as an expert witness in superior court cases involving limited liability companies and governance and other member issues. He earned his J.D. degree and LL.M. (taxation) degree from the University of Washington School of Law and also holds an LL.M. degree in transnational commercial practice from Europe.

 

Joseph C Mandarino is an attorney with the law firm of Smith, Gambrell & Russell, LLP. His practice focuses primarily on tax and financial planning. Mr. Mandarino writes and speaks on areas of business, tax and finance topics. He has published over 100 articles in journals and in-house newsletters, and has participated in over 200 presentations and seminars. His articles have appeared in the National Law Journal, Mergers & Acquisitions magazine, Tax Notes Today, the Journal of Real Estate Taxation, the Journal of S Corporation Taxation, the Journal of Multistate Taxation, the Tax & Finance Newsletter and the NYU Institute on Federal Taxation. In addition, Mr. Mandarino has spoken at meetings and seminars organized by numerous organizations, including the American Bar Association, the White House Conference on Small Businesses, the U.S. Small Business Administration, the Georgia Electronic Commerce Association, the Federation of Exchange Accommodators, the International Reinsurance Conference, the Service Corps of Retired Executives, and the United Way, as well as several panel-type TV discussion programs. He earned his B.A. degree from the University of Toronto; his J.D. degree, cum laude, from Loyola University School of Law; and his LL.M. degree from New York University School of Law.

Michael C Walch is a shareholder with Kirton McConkie PC, where his main areas of practice are corporate, partnership and personal taxation, business organization and transactions, non profit organizations, estate planning and asset protection, real estate, and Indian law. He is a frequent speaker both nationally and at the state level on Indian tax law topics. Mr. Walch's practice focuses primarily on tax and business matters, transaction planning for corporations, partnerships, limited liability companies and individuals, both domestic and international, including preparation of tax returns. He has expertise in representation in federal and state tax controversies and appeals. Mr. Walch also advises business principals on executive compensation packages, tax-free exchanges, reduction in liability, protection of assets, and non-profit activities. He represents both purchasers and sellers of ongoing businesses in mergers and acquisitions utilizing corporate and tax strategies, negotiating financing, and preparation of transactional documents. Mr. Walch has successfully negotiated over 200 commercial leases, obtained necessary zoning permits and represented purchasers of investment properties utilizing real estate tax planning strategies. He is a member of the Oregon State Bar, State Bar of Michigan and Utah State Bar. Mr. Walch is admitted to practice before the U.S. District Court of Oregon, the U.S. District Court of the Eastern District of Michigan, and the U.S. District Court of Utah. He also is admitted to the U.S. Tax Court, U.S. 9th Circuit, and he is a licensed public accountant in Oregon. Mr. Walch earned his B.S. degree, highest honors and magna cum laude, from Brigham Young University and his J.D. degree from Stanford University.