NASSAUSUFFOLK

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  • 1.  1031 Exchange

    Silver Most Valuable Member
    Posted 01-21-2022 10:16 AM
    Can my Client gift shares of stock in her S Corporation to her children and not void her 1031 exchange.

    FACTS
    My client owns 100% of her S corporation . The S corporation owns rental real estate and in 2021 did a 1031 exchange for other real estate. My understanding is that the replacement property needs to be owned by the taxpayer (the S Corp.) and used in a business manor for 24 months following the exchange. The property would be owned and used by the S corporation. According to my client, they were told they can gift her shares of S corporate Stock and not void the exchange. Can anyone confirm that this is correct or not. Any advise is appreciated.

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    Richard Trisciuzzi
    Richard Iris, CPA
    Nesconset NY
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  • 2.  RE: 1031 Exchange

    Posted 01-22-2022 08:07 PM
    Should be fine.  S-Corp's the taxpayer, regardless of who owns the stock.

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    Matthew E. Rappaport, Esq., LL.M.
    Vice Managing Partner
    Chair, Taxation Group
    Falcon, Rappaport & Berkman PLLC
    (516) 558-3377
    mer@frblaw.com
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  • 3.  RE: 1031 Exchange

    Platinum Most Valuable Member
    Posted 01-23-2022 08:54 AM

    The 24 month rule interests me. Because you mentioned "24" months, I introduce the question here, and would like to expand the discussion on this fine point. I am also posting a question on the topic.

     

    If a taxpayer does a 1031 exchange on a Single family residence which has been rented out for year, and subsequently after the 1031 exchange decides to convert it to personal use, what happens ?

    Is there a holding period required so as to protect the prior tax deferred change?

    Will there ever be an acceleration or recapture of the prior deferred gain ?

     

    Please see new posting " converted  after a 1031"

     

     

    Abby Alhante,  CPA

     

    Kurcias  & Alhante, LLC  CPAs

    525 Broadhollow Road   Suite 104

    Melville NY  11747

    516.829-5890  Ext  2   Fax 516-829-3976

    Mobile 516-381-9301

    AbbyA@KurciasAlhanteCPAs.com

    ( E mail response preferred )

     

     






  • 4.  RE: 1031 Exchange

    Posted 01-23-2022 07:29 PM
    If you want absolute certainty on an exchange of a property that will eventually be converted to a personal residence, see Rev. Proc. 2008-16.  Take any other approach and there will always be a certain amount of risk.

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    Matthew E. Rappaport, Esq., LL.M.
    Vice Managing Partner
    Chair, Taxation Group
    Falcon, Rappaport & Berkman PLLC
    (516) 558-3377
    mer@frblaw.com
    ------------------------------



  • 5.  RE: 1031 Exchange

    Platinum Most Valuable Member
    Posted 01-23-2022 07:36 PM

    Mathew

     

     

    And did you say absolute certainty... I thought we were talking tax   and there is NO ABSOLUTE anything....

     

    I read it, and I am fairly comfortable  with my knowledge now...

     

     

    Hope to see you     or if not   here you soon.

     

     

    Abby

     

     






  • 6.  RE: 1031 Exchange

    Silver Most Valuable Member
    Posted 01-23-2022 11:46 AM
    Thank you Matthew

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    Richard Trisciuzzi
    Richard Iris, CPA
    Nesconset NY
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Discussion Disclaimer

The opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute an accounting opinion.