Tax Free Exchanges Using Tenant in Common Interests: The IRS Clarifies an Otherwise Murky Area

Winter 2005

Reprinted from the Real Estate Finance Journal with permission. Copyright © 2004 West, a Thomson business.

The Internal Revenue Service has provided some clarity in a recent Revenue Procedure as to how an owner of a tenants in common interest can sell or acquire an undivided interest in real property and qualify the transaction as a Tax-Free Exchange.  However, as this article explains, owners of a tenants in common interest must keep in mind that the Revenue Procedure is not a substantive interpretation of the law but rather a guideline for such property owners to approach the IRS in seeking a ruling.

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David Finch

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