1031 Exchanges
Proceeds from the sale of a 1031 exchange must be held by this person before the replacement property is purchased.
Who is a qualified intermediary?
This type of adjustment occurs when there is transfer of interest by a partner.
What is a 743(b) adjustment?
This property is subject to unrecaptured gain at 25%.
What is 1250 real property?
Real estate rental activities automatically fall under this category regardless of the taxpayer's level of activity.
What are passive activities?
A taxpayer that performs more than 50% and 750 hours of services in real property trade or businesses.
What is a real estate professional?
A strategy used when one partner wants to complete a 1031 exchange and the other partners wants to cash out
What is a drop and swap or swap and drop
A step-up is used to make this equal for tax purposes.
What is inside versus outside basis?
Depreciable personal property including machinery, furniture & equipment.
What are section 1245 property?
The number of hours that must be performed in real estate activities in order to qualify as a real estate professional.
What is 750 hours?
Election made in order to qualify for material participation for real estate professionals with multiple rental activities.
What is aggregation election?
The number of days required to complete the purchase of replacement property
What are 180 days
This type of adjustment occurs when there is a distribution of partnership property.
What is a 734(b) adjustment?
All depreciable assets that are held longer than one year.
What are section 1231 assets?
This limits the amount of loss a taxpayer can take to the amount of their investment and their share of recourse and qualified non-recourse debt.
What are at-risk limits?
Rental activities that are passive are subject to 3.8% additional tax.
What is net investment income tax?
Refers to non-like kind property received in an exchange
What is boot?
The basis each partner holds in his partnership interest as opposed to their tax basis.
What is outside basis?
Taxpayer losses from the sale of 1231 assets?
What are ordinary losses?
This loss limitation is comprised of partners' contributions plus their share of partnership liabilities including nonrecourse liabilities.
What is tax basis?
Taxpayer participation that does not meet 750/50% rule but make management decisions.
What is active participation?
When a taxpayer acquires a replacement property before they sell the relinquished property
What is a reverse 1031 exchange?
This step-up adjustment is required to be backed out as an m-2 adjustment for tax basis reporting requirements.
What is a 743(b) adjustment?
Asset that qualifies as 1231 property that is neither real or personal property.
What is goodwill?
Situation that can occur when recourse debt is converted to a nonrecourse debt?
What is at-risk recapture?
Best Wipfli tax industry group.
What is CRE?