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Taxpayer Uses Attorney Son as QI  
1031 Exchange Fails; Taxes Due 
In Blangiardov. Commissioner, T.C., No. 11978-13, T.C. Memo. 2014-110, 6/9/14, the taxpayer owed tax on a $1,366,993 gain as well as accuracy-related penalty of $273,397.20 related to a deficiency on his 2008 Federal income tax return, the year he reported a 1031 tax-deferred exchange.


Here a few facts about the case:

  •  In 1988, taxpayer Frank Blangiardo and his wife purchased a residential property for $488,000.
  • Taxpayer divorced and paid ex-wife $500,000 as part of settlement in 2000.  She agreed to waive all rights to the property.
  • Taxpayer remarried and then divorced another wife in 2006.  She was paid $80,000 and agreed to waive all rights to the property.
  • As part of a 1031 exchange, taxpayer sold the property for $2,250,000 and acquired unimproved land as replacement property.
  • Taxpayer used his son who is an attorney to serve as the qualified intermediary (QI).
  • Taxpayer claimed the $580,000 paid to his ex-wives increased his basis in the relinquished property under section 1041 (transfers of property between spouses).

 Read More

FEA Launches Website to Aid in Effort to Preserve Section 1031
The Federation of Exchange
Accommodators (FEA),
the national trade association for 1031 exchange practitioners, launched a website which will be a central place to stay informed, participate and advocate for the section 1031 industry relating to tax reform and the proposed repeal of section 1031.

Please visit the new website where you will find information about the legislative proposals that severely limit or call for the outright repeal of IRC �1031 and like-kind exchanges.


The website also offers a central location to educate and advocate for the �1031 industry regarding the legislative and Administration proposals.


Contact your lawmakers through the website, voice your opposition to the proposals, and let them know how �1031 exchanges benefit you or your clients.
Trending this Month...  

Seller of Replacement Property Financing the Acquisition 

More and more Exchangers are having the seller of the replacement property finance the acquisition instead of using a traditional lender.  For the seller, they can report the sale as an installment sale and receive some tax benefits.  The Exchanger must be sure to reinvest all net equity into replacement property before financing.

Wealth Building Webinars
The first Thursday of each month, we offer our complementary 1031 Exchanges Made Easy webinar as part of our Wealth Building Webinar Series designed to help you build and preserve wealth. Weekly webinars will start back up in September. 

Register today!   
July 10th:  1031 Exchanges Made Easy 
August 7th:  1031 Exchanges Made Easy

We continue to get questions about Structured Sales so we continue to run this article. 

Structured Sales Offer 1031 Alternative

Tax-Deferral Strategy Opens New Options

A "Structured Sale" is an improved version of the traditional installment sale provisions in IRC �453. Instead of receiving a lump sum cash payment upon the sale of the property, the seller receives installment payments spread over a number of years and the gain is deferred over the life of the note with taxes only due when payments are received. A Structured Sale combines the security of a cash sale with the tax benefits of an installment sale.

 Read more about Structures Sales 


Message from our President

Margo McDonnell

Dear Friends,

AHHHH! Summertime! The beautiful weekend weather continued for the Mid-Atlantic states.  Truth be told, I am writing while in Ocean City, NJ - one of my family's favorite places - watching the boats on the bay.  Sitting on the beach as I did earlier today, I always seem to do a lot of daydreaming about the goals my husband I have and I can't help but think of the many opportunities 1031 exchanges create for investors and business owners in resort areas such as this.  Whether you have investment property here in Ocean City, on the Florida coast or the mountains of Central Oregon, exchanges give you the ability to trade up into a better property with higher income potential.  It also gives others the chance to exchange into their first property in that area.  And it also gives you the opportunity to convert your investment property into your vacation home or even a primary residence.  I think I could get used to this!


Even if it is sitting on your back deck, wherever your favorite summertime place is, I hope you enjoy quality time there with family and friends.  And if you are a soccer fan, too, I hope you catch some of the World Cup games.  Go USA!



Warm regards,  
Article Exchange

Following are articles related to 1031 exchanges, taxes, real estate and related topics you may find of interest. 


1031 Tax Deferred Exchanges At Risk


April 17, 2014


Proposed Tax Code Reform Could Impact Real Estate Industry

Real Estate Weekly 

May 7, 2014


If you have an article you would like to share, please forward it to Margo McDonnell, CES� and we'll include it in next month's reading list.
About 1031 CORP.
Serving as a nationwide qualified intermediary for 1031 tax-deferred exchanges since 1991, 1031 CORP. strives to provide a superior exchange experience for our customers and their advisors.  We provide our customers with enhanced security of funds, knowledgeable exchange professionals and a commitment to keep the exchange process simple for our customers and their advisors.  Every member of the exchange team is a Certified Exchange Specialist� and has the experience and expertise to facilitate even the most complex exchange transaction, including reverse, improvement and personal property exchanges.  Additional information can be found at www.1031CORP.com.
In This Issue
Taxpayer Uses Attorney Son as QI; 1031 Exchange Fails
FEA Launches Website to Aid iin Effort to Preserve Section 1031
Trending this Month
Wealth Building Webinars
Structured Sales Offer 1031 Alernative
Message from our President
Article Exchange

Margo McDonnell

Margo McDonnell, CES
Certified Exchange Specialist
1.800.828.1031 ext. 212
Mobile: 610.680.6896
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1031 CORP. Logo

Sue Umstead, CES 
Certified Exchange Specialist
Senior Vice President
1.800.828.1031 ext. 208
Mobile: 610.755.8520

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1031 CORP. Logo

Marissa LoCascio, CES
Certified Exchange Specialist
Vice President
1.800.828.1031 ext. 210
Mobile: 610.742.4351

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Sanna Phinney, CES
Certified Exchange Specialist
Senior Vice President
1.800.828.1031 ext. 230
View my profile on LinkedIn

Rich Heller

Richard Heller, Esq., CCIM, CES
Find me on Facebook
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 Bettye Matthews

Bettye J. Matthews, CPA
View my profile on LinkedIn


Joseph F. Szajnecki, CES�
Shale 1031CORPInterested in staying
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