In this practical webinar, you will be equipped with the knowledge and tools to advise clients on the advanced section 1031 exchange structures in light of the 2017 legislation and recent regulatory guidance. These advanced exchange structures include dividing a partnership in proximity to an exchange (“drop-and-swap”) or forming a partnership following an exchange (“swap-and-drop”). These rules implicate aspects of IRC 1031 and provisions of subchapter K. Some members of legacy corporations that own real property also look to do section 1031 exchanges, but such arrangements are subject to the corporate tax regime, complicating proximate restructuring and exchanging.

The "drop and swap" technique can be implemented by members of partnerships who wish to sell the partnership property and go their separate ways, but also retain the option of doing a section 1031 exchange. Such transactions also come with substantial complexities and risks. You will learn about the rules that property owners and their advisors must navigate to ensure the break-up and exchange qualify for nonrecognition under section 1031.

"Mixing bowl" structures potentially allow partners to separate their interests in multiple real estate entities on a tax-deferred basis by first consolidating commonly owned entities into a master limited liability company and subsequently liquidating that company. You will learn how to prepare for significant complexities when implementing a mixing bowl structure, including the disguised sale and anti-mixing bowl provisions of the Internal Revenue Code.

In this practical webinar, you will review the drop and swap and mixing bowl techniques for purposes of tax-free or tax-deferred partnership asset exchanges. You will examine best practices in structuring these transactions to maximize IRS recognition of the desired tax treatment and minimize challenges.

 

Topics to be covered include:

• Section 1031 changes in the 2017 legislation and recent guidance related to section 1031 exchanges
• Drop-and-swap transaction
• Drop-swap cash-outs
• Swap-and-drop transactions
• Mixing-bowl transactions
• Corporations and drop-swap transactions

 

Upon course completion, you will be able to:

• Outline the requirements of section 1031 on partnership asset exchanges
• Describe the impact of tax reform on the use of section 1031 for certain assets
• Implement the drop-and-swap transaction to maximize section 1031 treatment on the property exchanged
• Utilize the mixing-bowl technique to allow partners to separate their real estate holdings in commonly owned entities without triggering immediate tax
• Advise owners of corporations on how to combine a corporate division with a section 1031 exchange