All Corporate & Institutional Content

Advance Planning Can Help with Early Release of Exchange Proceeds

David M. Gorenberg, CES® |
Corporate & Institutional
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Occasionally, a taxpayer will request the return of his or her exchange proceeds in the middle of a §1031 exchange. But it is important to consider the consequences. For example, a taxpayer could trigger a capital gains liability if he or she identifies multiple replacement properties, acquires one of them, decides not to complete the rest of the exchange, then requests the return of the remaining proceeds from the qualified intermediary (QI).

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Vacation Homes and 1031 Exchanges

David M. Gorenberg, CES® |
Corporate & Institutional
1031 Vacation Home NC.jpg

Until recently, it has been unclear whether IRC Section 1031 applies to the “exchange” of vacation homes. In the absence of binding guidance, taxpayers often referred to a 1981 Private Letter Ruling (PLR) that seemed to indicate exchange treatment was available where the  taxpayer had acquired both the relinquished property and replacement property in hopes of future appreciation.

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Keep Your 1031 Exchange Proceeds Safe

David M. Gorenberg, CES® |
Corporate & Institutional
1031 Proceeds NC.jpg

The trouble began in 2007. The 1031 Tax Group LLC, a privately-held qualified intermediary based in Richmond, VA, filed for bankruptcy protection. Edward H. Okun is owner and sole “member” of the company. Additionally, 16 other subsidiary firms (in San Jose, Boston, Denver, San Antonio, Tampa and New York), each designated as qualified intermediaries, also sought bankruptcy protection in the filing.

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