OMB’s Office of Information and Regulatory Affairs (OIRA) completed its review of proposed regulations from the U.S. Treasury Department concerning like-kind exchanges.
The 2017 tax law (Pub. L. No. 115-97, the law that is often referred to as the “Tax Cuts and Jobs Act” (TCJA)) made amendments to Code section 1031 by limiting the like-kind exchange rules to exchanges of real property. The 2017 tax law further provided the deferral rules under section 1031 are no longer allowed for an exchange of real property held primarily for sale. Real property located in the United States is not considered like-kind to real property located outside the United States.
Treasury regulations that are identified as “major” regulations are subject to review by OMB’s OIRA before being issued, pursuant to Executive Order 13771. OIRA reported its review of the proposed regulations was completed on April 20, 2020.
OIRA has identified the proposed regulations, as follows:
These regulations are further described on the OIRA website as follows:
The regulation will provide guidance on the amendments made to 1031 of the Internal Revenue Code enacted on December 22, 2017, by section 13303 of the Tax Cuts and Jobs Act, Pub. L. 115-97. The regulation will impact taxpayers who engage in transactions that are subject to 1031. The regulation is expected generally to apply to transactions entered into after the effective date of the regulation.
Now that OIRA review has been completed, Treasury and the IRS can be expected to release these proposed regulations for publication in the Federal Register—the exact date of publication not being known.
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