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- Chapter 55 Like-kind Exchanges
Chapter § 55.8 DEFERRED ("STARKER") EXCHANGES
Jurisdiction | Oregon |
§ 55.8-1 Defined
A deferred exchange is an exchange in which the exchanger conveys the relinquished property to an accommodator, and at a later point through an otherwise-qualifying transaction, the exchanger receives the replacement property. A forward-deferred exchange can be structured with or without an accommodator.
§ 55.8-1(a) No Accommodator
The first deferred exchange approved by the courts was in Starker v. United States, 602 F2d 1341, 1354-55 (9th Cir 1979). The original Starker exchange was structured without an accommodator. In the first leg, the relinquished property is transferred to the buyer, in consideration for which the exchanger receives a promise (the exchange agreement) from the buyer to acquire and transfer the replacement property to the exchanger. In the second leg, the buyer acquires the replacement property and transfers it to the exchanger, completing the exchange.
§ 55.8-1(b) With an Accommodator
Most deferred exchanges use an accommodator to complete the transaction more quickly and easily. See Form 55-1 for a sample accommodator exchange agreement.
§ 55.8-2 Identification Requirement
§ 55.8-2(a) Identification Period
In a deferred exchange, the replacement property must be properly identified within the identification period. The identification period starts on the day that the exchanger "transfers the relinquished property and ends at midnight on the 45th day thereafter." Treas Reg § 1.1031(k)-1(b)(2)(i). If the exchanger transfers more than one relinquished property in a single-exchange transaction, the identification period starts when the first property is transferred. Treas Reg § 1.1031(k)-1(b)(2)(iii). The identification period is not extended by weekends or holidays. If the identification is not timely made, the exchange will be taxable. Dobrich v. Comm'r of I.R.S., 188 F3d 512 (9th Cir 1999) (unpublished disposition); Smith v. C.I.R., 73 TCM (CCH) 2158 (1997), aff'd 129 F3d 1260 (4th Cir 1997).
§ 55.8-2(b) Manner of Identification
The identification requirements are set forth in § 55.8-2(b)(1) to § 55.8-2(b)(6).
§ 55.8-2(b)(1) Written Document
The replacement property must be designated in a written document. Treas Reg § 1.1031(k)-1(c)(2). See Form 55-4.
§ 55.8-2(b)(2) Execution
The exchanger must sign the document. Treas Reg § 1.1031(k)-1(c)(2). There is no authority to support execution by someone holding a power of attorney.
§ 55.8-2(b)(3) Delivery
The document must be delivered by hand, mail, facsimile, e-mail, or some other method to another party involved in the exchange, including the seller, the accommodator, the escrow agent, or the title company, before the end of the identification period. Treas Reg § 1.1031(k)-1(c)(2).
§ 55.8-2(b)(4) Description
The replacement property must be unambiguously described, such as by a legal description, a street address, or the name of a particular building...
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Request your trial- Oregon Real Estate Deskbook, Vol. 5: Taxes, Assessments, and Real Estate Disputes (OSBar)
- Chapter 55 Like-kind Exchanges
- CHAPTER 55 LIKE-KIND EXCHANGES
- Chapter § 55.1 INTRODUCTORY COMMENT
- Chapter § 55.2 QUALIFIED PROPERTY
- Chapter § 55.3 LIKE-KIND REQUIREMENT
- Chapter § 55.4 EXCHANGE REQUIREMENT
- Chapter § 55.5 TREATMENT OF BOOT
- Chapter § 55.6 BASIS OF REPLACEMENT PROPERTY
- Chapter § 55.7 THREE-PARTY EXCHANGES
- Chapter § 55.8 DEFERRED ("STARKER") EXCHANGES
- Chapter § 55.9 REVERSE-DEFERRED EXCHANGES
- Chapter § 55.10 IMPROVEMENT (BUILD-TO-SUIT) EXCHANGES
- Chapter § 55.11 ACCOMMODATORS
- Chapter § 55.12 PARTNERSHIP EXCHANGES
- Chapter § 55.13 INSTALLMENT SALE AND EXCHANGING
- Chapter § 55.14 RELATED-PARTY EXCHANGES
- Chapter § 55.15 STATE TAXATION OF EXCHANGES
- FORM 55-1 ACCOMMODATOR EXCHANGE AGREEMENT
- FORM 55-2 ASSIGNMENT OF SALES AGREEMENT FROM EXCHANGER TO ACCOMMODATOR
- FORM 55-3 ASSIGNMENT OF PURCHASE AGREEMENT FROM EXCHANGER TO ACCOMMODATOR
- FORM 55-4 DESIGNATION OF REPLACEMENT PROPERTY
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