Property Transactions Tcp

TCP — Property Transactions (Advanced) Exam: CPA — TCP (Tax Compliance & Planning Discipline) Last Updated: June 2026 --- ## Advanced Like-Kind Exchange Planning — §1031 ### Deferred Exchange (Starker Exchange) Most like-kind exchanges are delayed (not simultaneous): 1. Taxpayer sells relinquished property (Day 0) 2. Proceeds held by qualified intermediary (QI) — taxpayer cannot touch proceeds 3. 45-day identification period: Identify replacement property(ies) in writing 4. 180-day exchange period: Acquire replacement property(ies) Identification rules: - 3-property rule: Identify up to 3 properties regardless of FMV - 200% rule: Identify any number of properties if total FMV ≤ 200% of relinquished property FMV - 95% rule: Identify any number if taxpayer acquires ≥ 95% of identified properties' FMV ### Boot in Exchanges Boot triggers gain recognition: - Cash boot: Cash received from QI or counterparty - Mortgage boot (debt relief): If old property had more debt than new property, the net debt relief = boot - Non-like-kind property received Gain recognized = Lesser of realized gain or boot received Loss: Never recognized in §1031 exchange. ### Reverse Exchange Taxpayer acquires replacement property before selling relinquished property. Must use Exchange Accommodation Titleholder (EAT) to hold title. Same 45/180 day periods apply (from when EAT takes title). --- ## Installment Sales — Advanced ### Dealer vs. Non-Dealer Dealers in property (inventory): Cannot use installment method — report full profit in year of sale. Non-dealers: Installment method available for sales of real property and most personal property. ### Related Party Installment Sales If an installment sale is to a related party (family members, >50% controlled entity) who then resells within 2 years: - First sale rule: Original seller recognizes gain when related…