Can a taxpayer have an exchange with a related party (brother, sister, spouse, child)?
Yes, but there is a special rule for exchanges between related parties which require taxpayers exchanging property with each other to hold the exchanged property for at least two years after the exchange to qualify. If either party disposes of the property received in the exchange before the 2 year period, any gain or loss that would have been recognized on the original exchange must be taken into account on the date that the disqualifying disposition occurs.
Related Questions
- What happens if I have an eligible spouse, but name another (mother, father, sister, brother, child, former spouse who has not remarried) individual as my Member-Survivor (Option D) beneficiary?
- Can my high school age child travel with an older brother or sister or friend or cousin etc.?
- Can a taxpayer have an exchange with a related party (brother, sister, spouse, child)?
