Related Party Like-Kind Exchanges: Teruya Brothers and Beyond

Bradley T. Borden, Washburn Law School
Kelly E. Alton, Nationwide Exchange Services
Alan S. Lederman, Gunster, Yoakley & Stewart, P.A.

Abstract

The Ninth Circuit recently held that the non-tax-avoidance exception of Section 1031(f) generally will be unavailable where the taxpayer defers tax through a related-party exchange and cannot establish that the related party will incur a higher "tax price." This article examines this new addition to the body of law governing related-party exchanges and discusses planning approaches that exist after the ruling.