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2 hours
CTEC IRS NASBA

IRS Section 1031 - Understanding Like Kind Exchanges

Course Description

IRC section 1031 represents the ultimate in tax planning: realize income without having it recognized for tax purposes. However, if tax planning is improper, the consequences can be significant, as the taxes may leave insufficient cash to buy the replacement property.

Creating a like-kind exchange requires tax planning and proper execution. To ensure that clients receive favorable tax treatment, it is vital that the practitioner act as the focal point in the transaction with taxpayers, realtors, attorneys, and escrow agents.

Topics Covered:

  • History of section 1031
  • Tax consequences of sale and exchange of property
  • Realized and recognized gain
  • Advantages and disadvantages of like-kind exchanges
  • Applicability of section 1031 to
    • Trade, business, or investment property
    • Personal residence or vacation home
  • Like-kind property
  • Planning issues:
    • Timing
    • Identification rules
    • Same taxpayer requirement
    • Exchanges between related parties
    • Impact of boot
  • Depreciation recapture
  • Disallowed exchanges
  • Types of tax-deferred exchanges
    • Deferred exchanges
    • Reverse exchanges
    • Multiple property exchanges
  • Proper reporting of like-kind exchanges
  • Depreciation of property acquired in like-kind exchanges
  • Estate planning tips

Learning Objectives:

  • Be able to identify qualifying like-kind property
  • Know how to avoid unplanned tax consequences of improperly executed exchanges
  • Know how to calculate the tax basis of property involved in an exchange
  • Know how to report a like-kind exchange on a tax return
  • Delivery Method: Self Study

Field of Study: Other Federal Tax
Prerequisites: None
Advance preparation: None
Program Level: Basic
Expiration: In accordance with NASBA standards, access to this course will terminate one year from the date of purchase. Incomplete courses will no longer be accessible beyond the one year deadline.

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