Discussion:1031 Exchange Corporation issue

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Discussion Forum Index --> Basic Tax Questions --> 1031 Exchange Corporation issue
Discussion Forum Index --> Tax Questions --> 1031 Exchange Corporation issue

Jigisha (talk|edits) said:

29 January 2009
My client did the 1031 exchange and bought two new business. For one business, he used the same corp name and fein but for the second one he formed the new corp with the same name(in a different state) and new fein. How do I transfer the second one under old corporation?

Kevinh5 (talk|edits) said:

29 January 2009
asset purchase or stock? you've got to back up and explain that he even qualified for a 1031 first.

CrowCPA (talk|edits) said:

29 January 2009
Better be assets. You cannot use 1031 for stock.

Jigisha (talk|edits) said:

29 January 2009
Asset purchased. He does qualify for 1031 exchange.

Kevinh5 (talk|edits) said:

29 January 2009
sorry, I don't see how a purchase in another taxpayer (other corp) qualifies

Harry Boscoe (talk|edits) said:

30 January 2009
Who sold what?

Riley2 (talk|edits) said:

30 January 2009
Exchanging out of a business is tricky. Remember that if the client relinquished his corporate stock for stock in 2 new corporations, this is not a 1031 exchange.

Also, unless the exchange involved an exchange of real estate, it is virtually impossible to satisfy the like-kind requirements for an exchange of business assets. For example, goodwill of one business cannot be like-kind to goodwill of another business.

Jigisha (talk|edits) said:

30 January 2009
Let me clarify. Its a ABC Corp- Gas station & Convenient store sold the assets and bought liquor store and real estate. Liquor store is under the old corp and real estate is under the new corp with exact same corporation name but with new FEIN. Now how do I change the new FEIN to old FEIN. May be just call IRS and let the closing company know about it?

Kevinh5 (talk|edits) said:

30 January 2009
I don't see how that is a 1031.

Kevinh5 (talk|edits) said:

30 January 2009
you need to merge the corporations

Jigisha (talk|edits) said:

30 January 2009
How to merge the corporation?

Kevinh5 (talk|edits) said:

30 January 2009
do a search 'reorganization' for starters

Riley2 (talk|edits) said:

1 February 2009
Sounds like the client caused a liquidation gain in the old corporation by putting the real estate in the new corporation. The client's attorney can help you with merging the 2 corporations (if there is a reason to merge).

In general, it is a bad idea to put real estate in a closely-held corporation.

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