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IRS Provides Safe Harbor for Like-Kind Exchanges Not Completed Because of Defaulting Qualified Intermediary

In Revenue Procedure 2010-14 (Rev. Proc. 2010-14), the Internal Revenue Service (the IRS) has granted relief for a taxpayer who was unable to timely complete a like-kind exchange because its qualified intermediary (the QI) entered into bankruptcy or receivership. A taxpayer that meets four requirements set out in Rev. Proc. 2010-14 will recognize gain or loss only upon the disposition of the relinquished property using a gross profit ratio method and only when payment is received.

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