Revenue Procedure 2014-3
Section 4.01(43) of recently released Revenue Procedure 2014-3 provided special rules for exchanges between related persons. It provides two exceptions when a related party exchange is acceptable assuming all other Section 1031 requirements are satisfied:
- a transaction involving an exchange of undivided interests in different properties that results in each taxpayer holding either the entire interest in a single property or a larger undivided interest in any of the properties; or
- a disposition of property in a nonrecognition transaction, whether an exchange described in Section 1031(f) involving related parties, or a subsequent disposition of property involved in the exchange, has as one of its principal purposes the avoidance of Federal income tax, or is part of a transaction (or series of transactions) structured to avoid the purposes of Section 1031(f).
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