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Old 08-22-2005, 09:40 AM
Bird Legs Bird Legs is offline
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Default 1031 tax free exchange?
Corp. A is a majority partner in a partnership which owns land. My client is a minority partner in the partnership. Corp. A wants to buy my clients interest in the partnership.
Question: If my client takes Class B stock in corp. A in exchange for his partnership interest in the land, would this qualify for a sect. 1031 tax free exchange?
Or would tax have to be paid on any gain?
Thanks.
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Old 08-22-2005, 10:52 AM
Bees Knees Bees Knees is offline
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Section 1031(a)(2)(D) says the nonrecognition of gain rules do not apply to an exchange of a partnership interest.
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Old 08-22-2005, 10:55 AM
jainen jainen is offline
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Default Like-kind rules
Like-kind rules for intangibles are not as wide-open as for real estate. You have to match the specific rights being traded. In any case, corporate stock is never eligible for 1031 treatment.
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Old 08-22-2005, 11:41 AM
Bird Legs Bird Legs is offline
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Default Thanks
to both of you for your response.
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