1031 Exchange Eligibility Pittsburgh PA

Courts that have analyzed 1031 exchange eligibility of a property have generally concluded that the requirements are met if the property is held “primarily for investment.” In other words, if there is objective evidence that the taxpayer’s primary motive is to hold the property for investment, then limited use of the property by the taxpayer for personal enjoyment will not destroy the investment character of the property.

Local Companies

Bennu Property Management and Consulting
412-371-6510
P.O. Box 1357
Pittsburgh, PA
Darlene Restich @ Coldwell Banker Real Estate Inc.
412 264-8300
6305 University Boulevard
Moon Township, PA
Re/Max Renaissance Realty West
412-269-1861 Ext. 232
962 Beaver Grade Road
Moon Township, PA
Prudential Preferred Realty
412-496-8811
3911 William Penn Highway
Monroeville, PA
Century 21 Town and Country Real Estate Services
724-779-2101
7021 Crider Road
Mars, PA
Keller Williams Real Estate Pittsburgh
724-413-6983
Keller Williams Real Estate
Eighty Four, PA
Ccn Properties Llc
(814) 262-7970
212 College Park Plz
Johnstown, PA
Accent Property Management
(814) 266-3323
2450 Bedford St
Johnstown, PA
J M B Management & Leasing Inc
(717) 264-6151
1001 S Main St
Chambersburg, PA
Property Management Unlimited
(717) 848-1579
420 S Sherman St
York, PA

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Courts that have analyzed 1031 exchange eligibility of a property have generally concluded that the requirements are met if the property is held “primarily for investment.” Internal Revenue Code Section 1031(a) provides that:

"[n]o gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment" (emphasis added)

In other words, if there is objective evidence that the taxpayer’s primary motive is to hold the property for investment, then limited use of the property by the taxpayer for personal enjoyment will not destroy the investment character of the property.

 

Difficulties in determining intent

It is easy to frame the issue, but it is often difficult to determine whether the taxpayer’s investment intent dominates an intent to hold for personal use. This is especially true when the taxpayer holds a vacation property and uses it from time to time. The practical difficulty is compounded by the IRS's limited guidance concerning the requirements to prove that the property is held for investment. A recent Treasury Inspector General Audit report (“TIGA”) pertaining to the IRS’s enforcement of 1031 exchanges was critical of the IRS for its failure to provide guidance to taxpayers, thereby leaving unrebutted the claims of some promoters that vacation properties and second homes were generally eligible for exchange.

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Featured Local Company

Bennu Property Management and Consulting

We can customize a package to meet your specific needs.

412-371-6510
P.O. Box 1357
Pittsburgh, PA
www.bennumanagement.com

We specialize in single-family and small multi-unit residential property management. With busy family lives and heavy work schedules, there simply is not enough time left to receive phone calls, track unpaid rent, coordinate repairs, research advertising, show properties… And the list goes on!
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