What Investors Get Wrong About 1031 Exchanges & Drop and Swaps with Matthew Rappaport (Part 1)
Tax Smart Real Estate Investors PodcastShow Notes
This week on the Major League Real Estate Podcast, we're kicking off a two-part conversation with tax attorney Matthew Rappaport, Chair of the Taxation and Private Client Groups and Vice Managing Partner at Falcon Rappaport & Berkman.
In Part 1, Nate and Matthew break down what happens when real estate partners want to sell the same property but have different plans for the proceeds.
Matthew then goes into partnership 1031 exchanges and the strategy commonly known as a "drop and swap," including why a reorganization may be necessary when one partner wants to exchange while another wants to cash out or when multiple partners want to pursue different replacement properties.
They also discuss some of the costly mistakes that can put these transactions at risk, from failing to coordinate tax counsel, accountants, qualified intermediaries, brokers, and lenders to overlooking critical formalities involving ownership, agreements, insurance, banking, and tax reporting.
Matthew also explains why New York and California deserve special attention, how state tax authorities scrutinize these transactions, and several of the court cases that have shaped today's 1031 landscape.
And this is only Part 1.
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