Tax,
Real Estate/Development
Oct. 5, 2023
Section 1031 may help affordable housing gain momentum
As government agencies press affordable housing alternatives, Section 1031 may play an increasingly important role as a planning alternative. The IRS recently stated that development rights will be treated as real property for purposes of Section 1031.
Phil Jelsma
Partner and Chair of the Tax Practice Team
Crosbie Gliner Schiffman Southard & Swanson LLC (CGS3)
Email: pjelsma@cgs3.com
Phil is chair of the tax practice team at CGS3. He is recognized as a leading joint venture and tax attorney, with a 30-year background in real estate exchange transactions, syndications, nonprofit corporations and international tax planning.
In a new Private Letter Ruling, the Internal Revenue Service (IRS) recently held that a taxpayer’s acquisition of transferable development rights (TDRs), which acted as a form of density bonus, constituted tangible real property for purposes of Section 1031, which allows deferral of capital gains taxes on the sale of certain investment properties.
Development rights is defined as unused rights to develop a property to the extent permitted u...
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