Real Estate Tax Alert: Private Letter Rulings 201216007 and 201220012

December 2012
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Real Estate Tax Alert: Private Letter Rulings 201216007 and 201220012

At a glance

This alert summarizes two recent private letter rulings issued by the Internal Revenue Service (IRS) to REITs regarding the treatment of like-kind exchanges with related parties.

The Internal Revenue Service (the "Service") recently issued two Private Letter Rulings, 201216007 and 201220012, regarding the treatment of like-kind exchanges with related parties.

The primary question raised in each PLR was whether a taxpayer is permitted to defer gain as provided by Internal Revenue Code ("Code") Section 1031(a) when the taxpayer engages in a series of transactions with related parties and each transaction in the series of transactions would otherwise qualify as a like-kind exchange when viewed separately.