Revenue Procedure 2010-14

[kcjenkins]

Revenue Procedure 2010-14, which provides a safe harbor method of reporting gain or loss for certain taxpayers who initiate deferred like-kind exchanges under § 1031 of the Internal Revenue Code but fail to complete the exchange because a qualified intermediary (QI) defaults on its obligation to acquire and transfer replacement property to the taxpayer. If a taxpayer meets the requirements of the revenue procedure, the Internal Revenue Service will not treat the taxpayer as being in actual or constructive receipt of exchange proceeds if the taxpayer does not complete an exchange because of a default of a QI that becomes subject to a bankruptcy or receivership proceeding. A taxpayer reports gain under the revenue procedure on the disposition of relinquished property as the taxpayer receives payments.

Given the current market conditions, this has become a serious issue for more than a few people. So this one could be BIG for some clients.