Related Party Transactions

Related Party Two-Year Rule:
Under Section 1031(f), like-kind exchanges are allowed between related parties, but they can lose their tax-free treatment if either party disposes of the property received from the exchange within two years after the date of the transfer.

Who qualifies as related parties?
Parents, brothers, sisters, children, grandparents, more than 50% ownership in a corporation or partnership and a trust in which you are a beneficiary. The two-year rule does not apply to spouses (unless they are a non-resident alien).

Exception: Death or involuntary conversions.


Tax Consequences Of The Disposition Of Property

Related Articles
  1. Investing

    Party City Holdings: How It's Fared Since Its 2015 IPO (PRTY)

    Learn about Party City Holding's performance as a public company. Investors would have lost much more than the Russell 2000 Index by investing after the IPO.
  2. Taxes

    Trade Properties To Keep The Taxman At Bay

    Like-kind exchanges can mean a much lower tax bill on real estate for savvy investors.
  3. Small Business

    Master The Art Of Negotiation

    Learn the strategies that will help you to come out on top in any negotiation.
  4. Investing

    Understanding Related-Party Transactions

    In business, a related-party transaction refers to a transaction where parties on both sides have a common interest or relationship.
  5. Managing Wealth

    What's a Trust?

    A trust is a fiduciary relationship in which one party gives another party the right to hold property or assets on behalf of a beneficiary.
  6. Taxes

    How Does a Tax-Free Exchange Work?

    In regards to the sale of property, particularly in real estate, a 1031 exchange is increasingly being recognized for its tax benefits to investors of all levels.
  7. Investing

    Could Iceland's Pirate Party Save the Nation's Horrid Finances?

    After years of financial disasters, Iceland is poised to elect a party that plans to enact Iceland's own decentralized currency.
  8. Personal Finance

    5 Ways To Cut Your New Year's Eve Party Alcohol Costs

    It's about time to ring in the new year. Here are some great tips to help you cut booze costs on New Year's Eve.
  9. Insights

    Tea Party Vs. Republican Party: Who Will Win In 2016?

    What agendas define the rift between the Tea Party and the Republican establishment, and which side will win the presidential nomination in 2016?
  10. Investing

    Holding Titles On Real Property

    Find out how best to claim and convey ownership on your assets.
Frequently Asked Questions
  1. What are the Differences Among a Real Estate Agent, a broker and a Realtor?

    Learn how agents, realtors, and brokers are often considered the same, but in reality, these real estate positions have different ...
  2. What is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally ...
  3. Which is better, a fixed or variable rate loan?

    A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest ...
  4. What is the 1003 mortgage application form?

    Learn about the 1003 mortgage application form, what information it requires and why this form is the industry standard for ...
Trading Center