KPMG reports: Like-kind exchange regulations reflect requested changes, retain incidental property rule

KPMG reports: Like-kind exchange regulations

The 2017 tax law referred to as the “Tax Cuts and Jobs Act” (TCJA) significantly curtailed a taxpayer’s ability to defer gain under the like-kind exchange rules of section 1031. Final regulations under section 1031 (December 2020) address the following issues under the like-kind exchange rules.


Related content

  • Favorable like-kind exchange treatment is now limited to certain exchanges of real property. The final regulations providing guidance on the meaning of the term “real property” respond to comments and provide a comprehensive and generally clear framework for making this threshold determination. Read a February 2021 report [PDF 158 KB] prepared by KPMG LLP: What’s News in Tax: Final Like-Kind Exchange Regulations Reflect Requested Changes

  • The final regulations adopt an exception to a safe harbor for the acquisition of incidental personal property as part of a like-kind exchange of real property. Certain traps embedded in the exception could catch unsuspecting taxpayers by surprise, but changes made to the definition of “real property” in the final regulations could make its “bark worse than its bite.” Read a February 2021 report [PDF 110 KB] prepared by KPMG LLP: What’s News in Tax: Taking the Bite out of the Wolf: Final Like-Kind Exchange Regulations Retain Incidental Property Rule 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal