Corporate senior counsel David Shechtman and associate Matt Meltzer coauthored an article for The Practical Tax Lawyer titled, “IRS Finalizes 1031 Real Property Regs: What’s In, What’s Out, And What To Do,” that analyzes the Department of Treasury (the Treasury)’s new regulations and recommends structures for exchanges involving both permitted real property interests and ineligible personal property items.
On October 21, 2020, the Treasury enacted a final rule setting forth the definition of real property (the new regulations) for purposes of section 1031. The authors highlight that the new regulations establish that each asset is analyzed without regard to whether it contributes to the production of income unrelated to the use or occupancy of space – an important (and taxpayer-friendly) change from the approach of the proposed regulations.
