Recent IRS activity in revising the Form 1065 partnership tax return may foreshadow impending IRS enforcement activity related to “like-kind exchanges” of real property (known as Section 1031 exchanges). New, specific and conspicuous disclosure requirements on the Form 1065 insinuate the IRS’s intent to take a closer and more concentrated look at certain Section 1031 like-kind exchange activities and practices of partnerships and limited liability companies (LLCs).
The required disclosures are specifically aimed at partnership and LLC distributions of property following a like-kind exchange and distributions of tenancy-in-common (TIC) interests in property by these entities to their partners and members. In light of these events, partnerships and LLCs (as well as their partners and members) will want to pay close attention to their Section 1031 exchange planning. For additional background on this topic, please click here to view an article published in Shopping Center Business magazine.
Additional inquiries on this topic may be directed to the co-authors of the article:
William Quick is a shareholder with Polsinelli Shughart PC experienced in corporate governance and finance. He may be reached at 816-360-4335 or wquick@polsinelli.com.
Virginia Gross is a shareholder with Polsinelli Shughart PC with a practice focus in taxation. She may be reached at 816-360-4109 or vgross@polsinelli.com.
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