Do real property leases qualify for Section 1031 exchange treatment?
Yes. With the requirement that leases must have at least 30 years (including unexercised options) remaining at the time of the exchange to qualify as like kind property to real estate. Unexercised options to renew can be included in the 30-year calculation. Do the names on the replacement property and the relinquished property have to be the same? Yes. Exceptions include single member limited liability companies and grantor trusts which pass through entities for federal income tax purposes. Can I offer an exchange to my lender in lieu of foreclosure? Theoretically, yes, however it is still likely that there is a taxable capital gain and depreciation recapture even if there is no remaining equity. Because there are several complexities to consider, it is best to consult your CPA or tax advisor. Are partnerships allowed to do exchanges? Yes. All tax-paying entities are entitled to the benefits of Section 1031; however, the Code is clear that individual partners may not exchange their par
