Inclusion of future development costs in basis: old (and new) rules

Article Abstract:

Developers may include projected development costs in their cost estimates to avail of tax deductions if they comply with Revised Proclamation (Rev. Proc.) 75-25. Legislation is underway to insure that the inclusion of future costs will not run contrary to Department of Treasury regulations. A developer's compliance with Rev. Proc. 75-25 includes fulfilment of the conditions of contractual obligation, non-recovery of costs through depreciation, extension of time to assess tax and presentation of requisite data to the Internal Revenue Service.

Subdividers and developers, not elsewhere classified, Real estate developers, Finance, Real estate development

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Clarifying the timing of a failed like-kind exchange

Article Abstract:

The Notice of Proposed Rulemaking recommended by the IRS in Oct 30, 1992, was intended to facilitate planning of like-kind exchanges under Sec 1031 of the Internal Revenue Code. These like-kind exchanges poses a challenge for the taxpayers and their advisors since the tax treatment of failed transactions are not clear. In this situation, timing of the gain recognition becomes the primary consideration. Details of the new proposed regulations are presented along with dates when these measure go into full effect.

Real property exchanges, Taxation, United States. Internal Revenue Service

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Nonsimultaneous like-kind exchanges: the progeny of Starker

Article Abstract:

Section 1031(a)(3) of the Internal Revenue Code and Treasury Regulation Section 1.1031(k) rigorously define the qualities of nonsimultaneous like-kind exchanges and their applications to nontaxable acquisitions. These two sections were instituted due to the Starker vs. US case, wherein a person engaged in a nonsimultaneous like-kind exchange was charged with tax evasion. The two laws discourage applying for a nonsimultaneous exchange due to the restrictions defined by the provisions.

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