Written by Lee David Medinets, Esq.
General Counsel, MCRES and Senior Counsel for Madison 1031
IRC § 1031 provides an opportunity to defer taxes when like-kind properties are exchanged. In order to qualify, one essential requirement is that both the relinquished property and the replacement property must be “held for productive use in a trade or business or for investment.” Therefore, a common problem in like-kind exchanges is to determine whether a particular residential property is held for investment or for personal use. Two recent U.S. Tax Court cases give a little help in making that distinction. Continue reading