Multi Asset Exchange
It is not uncommon for a client to sell more than one property in an exchange and/or to acquire more than one replacement property in an exchange. The Regulations contemplate that more than one relinquished property can be included in the exchange and more than one replacement property can be included in the exchange, subject to the limitation on the number of possible replacement properties as set forth in the Regulations.
Why would I need a Multi Asset Exchanges Exchange?
- Sales of a Restaurant or Hotel, including the contents, land, building and franchise Agreement
- Sales of a division or manufacturing facility
- Sales of multiple parcels of real estate treated as one exchange
Things You Should Know
- Assets Exchange Groups and Residual Groups must be separated into their General Asset Class or Product Class.
- All liabilities taxpayer receives as part of the exchange against must offset all liabilities taxpayer is relieved from as part of the exchange.
- Exchange Group Surplus or Deficiency- comparing the aggregate fair market value of the properties received within an exchange group against those transferred.
- The Amount of Gain must be determined with respect to each exchange group, and the residual (entire) group as a whole
- If the client transfers more than one relinquished property and the relinquished properties are transferred on different dates, the identification period and the exchange period are determined by reference to the earliest date on which any of the properties are transferred.
- Generally the client must use the 200% rule for identification.
Is This Exchange Right For Me?
If you are selling multiple assets, including real estate that has significant amount of separately described business assets, such as a hotel or supermarket, a Multi Asset Exchange is right for you. With the recent increase in cost segregation studies, this is an issue that will only get more attention.
How to Get Started
Call our office at (513) 412-3481 or toll free at (800) 427-7212; our exchange coordinators are ready to discuss whether this type of exchange is right for you and how to get started. You may want to have your project details handy when we discuss your potential Multi Asset Exchange.