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1031 Tax Deferred Exchanges
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1031 Tax Exchange
Frequently Asked Questions
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WHAT IS A TAX DEFERRED EXCHANGE?
Internal Revenue Code Section 1031 allows you the opportunity to make specifically structured transactions that join together the sale of an old property and the purchase of a new "like-kind" property for the purpose of deferring capital gains taxes owed upon the sale of investment or income property.
WHAT IS CAPITAL GAINS TAX?
Capital gains is the difference between what a property sells for and the "adjusted basis" of the property. The current Federal tax rate (maximum) on long term capital gains is 28%, plus any applicable state taxes. Long term capital gains are not taxed as ordinary income. If performed properly, code section 1031 provides an exception to the rule requiring recognition of gain upon the sale or exchange of property. If the requirements of a valid 1031 exchange are met, capital gain recognition can be deferred until the taxpayer chooses to recognize it. For an exchange to be 100% tax deferred, the Exchanger must acquire replacement property that is of equal or greater value and spend all of the net proceeds from the relinquished property. Many specific requirements must be satisfied in order to complete the exchange properly.
WHAT IS A 1031 EXCHANGE EXPERT?
1031 Exchange Experts are primarily used for buying and selling investment and personal real estate.
WHAT IS A QUALIFIED INTERMEDIARY?
A Qualified Intermediary (“QI”) is a professional company that specializes in processing §1031 exchanges. It is the entity which structures, consults, guides and documents the exchange transaction from beginning to end. The QI is hired to prepare the exchange documentation and to hold the sale proceeds during the time between the sale of the existing property (Relinquished Property) and the acquisition of the new property (Replacement Property). The law requires the proceeds from the sale of the existing property be kept from your control until a suitable Replacement Property is identified and ultimately transferred to you by the QI. A sound Intermediary will provide safety and security for the funds held and provide the technical experience needed to maintain the integrity of the exchange. They are not allowed to give tax or legal advise, doing so could disqualify them as an Intermediary.
The QI’s services must be retained prior to the closing of the existing property. Waiting until after the closing will be too late!
Choosing A "Qualified Intermediary"
This is likely the most important choice you'll make when doing a 1031 tax deferred exchange transaction!
Paramount to every exchange is the safety of the funds held by the Qualified Intermediary.
Interview several Qualified Intermediary companies and pay careful attention of their "fund Management program".
You'll want to know:
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In whose name the funds are held.
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What the requirements are for deposit and withdrawal.
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Where the exchange funds are held.
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Whether or not the Qualified Intermediary is insured by a much larger parent company.
Qualified Intermediaries are not regulated (except in the state of Nevada). There have been several instances where the Qualified Intermediary stole the money. Your careful attention is required!
Please contact Melanie at (480) 296-9320 or mrettlerd@cs.com for a referral to some 1031 Tax Exchange Specialists in your area. Some of my recommendations are:
Asset Preservation, Inc 1031 tax deferred exchanges Their number is (800) 282-1031
Starker Services Their number is (602) 793-0055
WHAT ARE EXAMPLES OF QUALIFYING PROPERTY? WHAT IS "LIKE-KIND"?
The IRS Code Section 1031 allows for the EXCHANGE OF PROPERTY HELD FOR USE IN PRODUCTIVE TRADE OR BUSINESS OR PROPERTY HELD FOR INVESTMENT for like-kind replacement property. Real Estate is one class of "like-kind" property. All real estate held for investment qualifies as "like-kind" for any other real estate held for investment anywhere in the country. Examples of qualifying Real Estate property include (but not limited to):
- Bare land
- Single-family rental property
- Apartments
- Ranches
- Commercial buildings or property
- Industrial property
- Vacation home
- Condos
- Second home
- Duplexes
- Leasehold interest of 30 years or more
The term "like-kind" is often misunderstood to mean the usage of the property. This is not so. "Like-kind" simply means investment real estate for investment real estate. A commercial property can be exchanged for an apartment complex or bare land exchanged for a duplex or a ranch.
A persons PRIMARY RESIDENCE does NOT come under the rules of Section 1031, and is specifically EXCLUDED.
"Dealer Inventory" is a type of property that does not qualify as investment property. An example would be land that home builders purchase for their housing developments.
Personal property (NOT real estate) can also be exchanged under a different asset class, "personal property used in trade or business." Examples of personal property exchanges permitted are:
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How Does Someone Identify If The TRANSACTION IS A 1031 EXCHANGE?
The best way to confirm if there is a 1031 exchange is to ask the principals involved.
Is the property the Seller's residence?
If it is, then the Seller is not eligible for a 1031 Exchange.
Is the Buyer planning to live at the property? If he/she is, then the Buyer will not be eligible for a 1031 Exchange.
Is the property intended for investment purposes? If it is, then either the Buyer or the Seller might want to do a 1031 Exchange.
SHOULD A REAL ESTATE BROKER OR AGENT UNDERSTAND EXCHANGING?
Absolutely, YES. Clients can save substantial tax dollars through exchanging and agents must be able to explain the options that an exchange can offer. Therefore, it is necessary for real estate agents to have good knowledge and understanding of 1031 tax deferred exchanges.
CAN CASH BE TAKEN OUT WHEN DOING AN EXCHANGE?
Yes! However, any cash received will be subject to capital gains tax. You may take cash out at the closing of the sale property or upon completion of the exchange. Since you will be taxed on any proceeds being removed from the exchange, it will also be necessary to determine what your capital gain would be had you simply sold the property. If you take cash out equal to or more than your capital gain, then you will be paying all the tax owed and an exchange would not be needed.
Clients considering the sale of investment or income property should first consult with their financial or tax advisor to determine if a tax-deferred exchange will benefit their long-term investment goals and retirement plans. Ultimately, the client must decide whether to take advantage of an IRC Section 1031 exchange or write a check to the IRS!
WHAT IS A IRC SECTION 1034 PROPERTY?
IRC Section 1034 related to a primary residence only. A taxpayer is only allowed one primary residence, therefore, by reason of default, any other real property could be considered possible 1031 property. The only condition is that the property meets the guidelines of Section 1031.
IS IT BETTER TO EXCHANGE PROPERTY OR JUST SELL IT?
The most important reason is to able to defer potentially taxable gain one may realize from a sale of the property. This way one may be able to use All OF THEIR EQUITY to acquire another property, instead of the amount of equity left over after paying applicable Federal and State income taxes on their gain. Additionally, the ability to go from one type of property to another allows an investor to utilize these other concepts:
High equity property for >>>>>> Highly leverage property
Commercial property for >>>>>> Industrial and Apartments
Multiple property types for >>>>>> Single property type
Non-income producing land for >>>>>> Triple-net leased property
Multiple rental properties for >>>>>> Single-user commercial
Fully deprciated building for >>>>>> Property with a new depreciation schedule
One large building for >>>>>> Properties designated for each heir
It is possible, under the current IRS Section 1031 rules, to continue to exchange properties, using all of your equity, thus increasing your portfolio Net Worth much faster than were you to sell properties, pay the taxes, and then acquire another property with the remaining equity.
Here is an Example:
A SALE VS. AN EXCHANGE
1. CALCULATE NET ADJUSTED BASIS
Original Purchase Price (Basis) $150,000
plus Capital Improvement +$ 30,000
minus Depreciation -$ 75,000
equals Net Adjusted Basis $155,000
2. CALCULATE CAPITAL GAIN
Sales Price $475,000
minus Net Adjusted Balance + $155,000
minus Cost of Sale - $ 28,500
equals Capital Gain $291,500
3. CALCULATE CAPITAL GAIN TAX DUE
Recaptured Depreciation (25%)* $ 18,750
plus Federal Capital Gain (15%)** + $ 32,475
plus State Tax (AZ 5%)*** + $ 14,575
TOTAL TAX DUE $ 65,800
4. CALCULATE AFTER-TAX EQUITY
Sales Price $475,000
less Cost of Sale - $ 28,500
less Loan Balances - $120,000
equals GROSS EQUITY $326,500
minus Capital Gain Taxes Due - $ 65,800
equals AFTER-TAX EQUITY $260,700
5. ANALYZE REINVESTMENT-STRAIGHT SALE
After-Tax Equity X 4 ($260,700 X 4) $1,042,800
6. ANALYZE REINVESTMENT-EXCHANGE
Gross Equity = Net Equity
Gross Equity X 4 ( $326,500 X 4) $1,306,000
* 25% of $75,000
**15% of $216,500 (which is Capital Gain of $291,500 minus Recap. Depreciation of $75,000)
*** 5% of $291,500
WHEN IS A 1031 TAX-DEFERRED EXCHANGE APPLICABLE?
It is applicable when the property in question falls within the like kind definition and the principal intends to BUY another property of like kind within 180 calendar days following the close of escrow from the SALE, and when the Investor has a recognizable gain.
CAUTION must be exercised in this area. Property does not have to appreciate in value to have a gain!! The property may have a built in gain as a result of a previous exchange or from depreciation taken. Be sure to consult with your legal and/or tax advisor.
Remember, under the delayed exchange parameters, there is a maximum of 180 calendar days to purchase replacement property. Therefore, if the principal is not sure at the time of closing the sale property, it is imperative that it be structured as an exchange rather than a sale. Otherwise, if the escrow Is closed without the exchange in place, the principal will have receipt of proceeds and cannot perform an exchange.
The worst case is that if the exchange is set up and the principal decides not to buy replacement property and takes the proceeds, the principal just pays taxes as they normally would. Without the exchange being set up, the principal does not have that option. An informed Client, Seller, will appreciate the flexibility.
WHO ARE THE PRINCIPALS IN AN EXCHANGE?
The first Epson to identify is the one wanting to effect a 1031 Tax-Deferred Exchange. This person will be your Exchanger. If your Exchanger is the SELLER, you are handling a PHASE I EXCHANGE. If your Exchanger is the BUYER, you are handling a PHASE II EXCHANGE.
PHASE I CLIENT = SELLER & PHASE II CLIENT = BUYER
In a Phase I Exchange, your Buyer will be treated normally, as if there is no exchange involved in the transaction. You will only have to obtain the Buyer's signature to one document, the Amendment to Escrow/Closing Instructions. Otherwise, the Buyer does nothing different.
In a Phase II Exchange, the Seller will be treated normally, as if there is no exchange involved in the transaction. Again, you will only have to obtain the Seller's signature to one document, the Amendment to Escrow/Closing Instructions. Otherwise, the Seller does nothing different.
In a PHASE I Exchange a QUALIFIED INTERMEDIARY will be substituted into the transaction as the Seller.
In the PHASE II Exchange, a QUALIFIED INTERMEDIARY will be substituted into the transaction as the Buyer.
WHAT IS THE CURRENT IDENTIFICATION PERIOD, AND CLOSING TIME TO ACCOMPLISH A DELAYED 1031 TAX DEFERRED EXCHANGE?
After an exchange has been set up, by contacting a Qualified Intermediary prior to closing a sale, the Seller, Exchanger, must identify up to three (3) potential properties they MAY intend to acquire, within 45 days of the close of the sale escrow. It is immaterial what the value is of the potential properties.
One can list, or identify, four (4) or more, properties, however these properties cannot have an aggregate value of 200% or more of the sale property. If more than three (3) properties are identified, and the value exceeds 200% of the sale price, then you must close escrow on 95% of the list. Escrow must close, on at least one of the identified properties, within 180 calendar days from the date of the close of the sale escrow. Be sure to check with your legal and/or tax advisor.
WHAT HAPPENS TO THE MONEY?
In a Phase I Exchange, it is imperative that the Exchanger (who is the owner of the property) does NOT receive any money. The Seller's net proceeds are wired to the Intermediary into a separate, interest bearing account. Each exchange has its own account, therefore, you must call the Intermediary BEFORE wiring to obtain the account number. If not, the wire will probably be returned to you due to insufficient information.
In a Phase II Exchange, the funds required to close the transaction will be sent to you from the exchange account held by the Intermediary. You will need to contact the Intermediary to find out exactly how much money is in the exchange account. In the event there is insufficient funds in the exchange account to close your escrow/ closing, then the Exchanger will have to deposit the additional funds required to close the escrow/closing.
WHAT HAPPENS WHEN THE EXCHANGER OBTAINS A NEW LOAN FROM AN INSTITUTIONAL LENDER?
The Intermediary does not need to see or sign any of the lender's documents. This is the Exchanger's loan and only the Exchanger should be signing. Most lenders do not have a problem with the Qualified Intermediary inserted as the Exchanger's Name on Instructions or Settlement Statements. However, if the lender does not want to see a Intermediary's name on your statements or instructions, you can eliminate their name on items sent to the lender.
WHO IS, AND WHAT CAN I EXPECT TO PAY, A QUALIFIED INTERMEDIARY?
You should contact your local Title and Escrow Companies, local Attorney's and tax practitioners for references to a QUALIFIED INTERMEDIARY. We can help put you in touch with the skilled professionals. Contact Melanie at (480) 296-9320 or mrettlerd@cs.com. We are knowledgeable and glad to help.
WHY A QUALIFIED INTERMEDIARY?
In the regulations of 1991, many of the areas were clarified in Section 1031 of the Internal Revenue Code, and established the Safe Harbor provisions.
Safe Harbors include:
1. The use of a Qualified Intermediary;
2. Receipt of interest or Growth Factor by the Exchanger;
3. The use of a Qualified Escrow Account; and
4. The use of security instruments in an Exchange (such as the use of a Qualified Intermediary; qualified escrow/closing and trust accounts; third party guaranty).
WHAT VERBIAGE IS NECESSARY TO CHANGE THE TRANSACTION FROM A NORMAL BUY/SELL TO AN EXCHANGE?
The usual recommended procedure is to set out the Exchanger's intent to perfect a 1031 Tax-Deferred Exchange in the purchase agreement (contract) between the Seller and Buyer. The following is an example of language that is currently satisfactory to establish the Exchanger's intent:
PHASE I (SALE):
Buyer is aware that Seller is to perform a 1031 Tax-Deferred Exchange. Seller requests Buyer's cooperation in such an exchange and agrees to hold Buyer harmless from any and all claims, liabilities, costs or delays in time resulting from such an exchange.
PHASE II (BUY):
Seller is aware that Buyer is to perform a 1031 Tax-Deferred Exchange. Buyer requests Seller's cooperation in such an exchange and agrees to hold Seller harmless from any and all claims, liabilities, costs or delays in time resulting from such an exchange.
It is advisable to also have communicated with a Qualified Intermediary and include the following in a purchase, or sale, contract as well:
Seller, (or Buyer) has entered into an agreement with (name of the Intermediary), to act as their Qualified Intermediary in facilitating said exchange.
Provided the Exchanger's intent to perfect a 1031 Tax-Deferred Exchange is established in the Purchase, or Sale, Agreement and the Intermediary's documents are executed, it is not necessary to prepare separate EXCHANGE Instructions.
This may be contrary to what is expected in your area. By all means, make the Client happy. However, the IRS will look to the Purchase or Exchange Agreement to validate the exchange and not necessarily the Exchange Instructions. Be sure to contact your legal and/or tax advisor.
WHAT IS DIRECT DEEDING?
Pursuant to Revenue Ruling 90-34, IRS. 1990-16 (December 16, 1990) and I. R. S. Regulations 1.1031(k)-1(g)(4)(v), it is no longer necessary to do sequential deeding. That is, deed from the Seller to the Intermediary and then the Intermediary deeds to the Buyer.
It is now an accepted practice to deed directly, that is, the Exchanger deeds directly to the Buyer in a Phase I Exchange or the Seller deeds directly to the Exchanger in a Phase II Exchange.
WHAT HAPPENS WHEN BOTH THE SELLER AND BUYER ARE WANTING AN EXCHANGE?
This is not that unusual of a situation and is very simple to complete. You would handle the Seller's Exchange just like a Phase I Delayed Exchange and you would handle the Buyer's Exchange just like a Phase II Exchange.
HOW DO I PREPARE A 1099 FORM?
On a Phase I Exchange, you will prepare a 1099 form showing the Exchanger's name, address and Tax ID Number (Social Security Number). The Exchanger is the only one that needs to sign this form.
IT IS IMPERATIVE THAT YOU COMPLETE THE SECTION IN YOUR 1099 FROM THAT INDICATES THAT THIS PROPERTY IS PART OF AN EXCHANGE.
WHEN CAN THE EXCHANGER GET CASH FROM THE EXCHANGE?
If the Exchanger wants to receive a portion of his/her proceeds in cash, this must take place BEFORE any funds are sent to the Intermediary. Once the Exchanger tells you that he/she wants to receive money, contact the Intermediary right away to avoid any problems. Once the funds are deposited into the exchange account, the Exchanger cannot receive these funds until the exchange is completed.
WHAT IS NEEDED WHEN THE EXCHANGER IS A PARTNERSHIP, CORPORATION OR TRUST?
There is nothing different in how the exchange is handled, but the Intermediary will need to see a copy of the Trust Agreement, the Partnership Agreement, or a Corporate Resolution.
HOW SHOULD THE EXCHANGER'S NAME BE VESTED IN THE DEED?
To have a valid exchange, the Exchanger's vesting should be exactly the same in the Phase II transaction as it is in the Phase I. Therefore, if the Exchanger owns the relinquished property in his/her personal names, the Exchanger should not try and put the replacement property into a family trust until after the exchange is closed.
IS A 1031 EXCHANGE ALWAYS 100% TAX DEFERRED?
No. For an exchange to be 100% tax deferred, the Exchanger must acquire a replacement property that is of equal or greater value and spend all of the net proceeds from the relinquished property.
WHAT IS BOOT?
Boot is defined as any NON LIKE KIND property received by the Exchanger in the exchange and it is taxable.
1) CASH BOOT:
Cash Boot consists of any funds received by the Exchanger, either actually or constructively. If an Exchanger does not spend all of the proceeds from the sale of the relinquished property, he/she will have actual receipt of the balance not spent and pay taxes on that amount.
Constructive receipt of funds may occur in a case where the Exchanger carries back a note from his/her Buyer of the relinquished property, then sells that note at a discount. The Exchanger never actually receives funds for the discounted amount, however, he/she has constructively received that discount and pays tax on that amount.
2) MORTGAGE BOOT OR DEBT RELIEF:
Mortgage Boot occurs when the Exchanger does not acquire debt that is equal to or greater than the debt that was paid off, therefore, they were RELIEVED of debt. If the Exchanger does not acquire equal or greater debt on the replacement property, they are considered to be RELIEVED OF DEBT, which is perceived as taking a monetary benefit out of the exchange. Therefore, the debt relief portion is taxable, unless offset by adding equivalent cash to the transaction. More to it than just spending all the exchange equity!!
So an Exchanger must buy of equal or greater value while spending the NET (after costs) equity. It is absolutely acceptable to take cash out of the exchange and pay taxes on that amount only.
IMPORTANT: If the Exchanger wants cash out of the PHASE I exchange, the Intermediary must be notified immediately. The cash out must come directly out of the closing of Phase I and not from the Intermediary. Once the exchange equity is in the Qualified Escrow Account at the Intermediary's, the Exchanger cannot access the funds until the end of the exchange.
Please contact Melanie at (480) 296-9320 or mrettlerd@cs.com for a referral to some 1031 Tax Exchange Specialists in your area. Some of my recommendations are:
Asset Preservation, Inc 1031 tax deferred exchanges (800) 282-1031
Starker Services (602) 793-0055
DISCLAIMER: PLEASE NOTE THIS IS NOT INTENDED TO BE TAX ADVICE IN ANY CONCEPTION OF THE TERM. YOU ARE ADVISED TO CONSULT WITH YOUR LEGAL AND/OR TAX ADVISOR BEFORE ATTEMPTING ANY SALE, PURCHASE OR EXCHANGE OF REAL PROPERTY. IT IS STRONGLY RECOMMENDED THAT YOU CONSULT WITH YOUR LEGAL COUNSEL, TAX ADVISOR AND YOUR COMPANY MANAGEMENT REGARDING ANY SPECIFIC SITUATIONS OR HOW THE INFORMATION CONTAINED IN THIS MATERIAL RELATES TO YOU, YOUR COMPANY'S POLICY AND/OR ALL TAX, LEGAL AND LOCAL PRACTICES.
ALL INFORMATION CONTAINED HEREIN IS FROM RELIABLE SOURCES AND IS DEEMED TO BE ACCURATE, BUT IS IN NO WAY GUARANTEED TO BE ACCURATE . ALL OF THE INFORMATION HEREIN, IS CURRENT AS OF 2-1-1996. BE SURE TO CONTACT YOUR LEGAL AND TAX ADVISORS FOR ANY CHANGES AND UPDATES.
1031 Tax Exchange
Glossary
1031 TAX DEFERRED EXCHANGE:
A deferred Exchange is defined as an exchange in which, pursuant to "An Agreement", the taxpayer transfers property held either for productive use in a trade or business or for investment and subsequently receives another property to be held either for productive use in a trade or business or for investment. BASIS:
Method of measuring investment in property for tax purposes. Example: Original cost, plus improvements, minus depreciation taken.
EXCHANGER:
Taxpayer, Client.
GROWTH FACTOR:
Interest earned during the exchange, payable at the end.
RELINQUISHED PROPERTY:
Old property, property being sold by the Exchanger. (Use to be called the Downleg property, now commonly called Phase I property).
REPLACEMENT PROPERTY:
New property, property being acquired or the target property being brought by Exchanger. (Use to be called Upleg property, now commonly called Phase II property).
SIMULTANEOUS/CONCURRENT:
An exchange without any time span between the sale and buy.
STARKER:
Name of the taxpayer in U.S. Court of Appeal's case which authorized Delayed Exchanges. The term a "Starker Exchange" is no longer used to describe a Delayed Exchange.
LIKE-KIND PROPERTY:
Any real property for any other real property if said property(ies) are held for productive use in trade or business or for investment purposes.
SEQUENTIAL DEEDING:
Property is actually deeded to the Intermediary and the Intermediary deeds to the ultimate owner.
DIRECT DEEDING:
Vested owner deeds directly to the ultimate owner. Does not eliminate the duties of the Qualified Intermediary to acquire and transfer the relinquished property and acquire and transfer the Replacement Property.
IDENTIFICATION PERIOD:
The replacement property must be identified within 45 days of the close of escrow/closing the relinquished property. This 45 day rule is very strict and is not extended if the 45th day should happen to fall on a weekend or a legal holiday.
EXCHANGE PERIOD:
The replacement property must be received by the taxpayer within the "Exchange Period," which ends on the earlier of 180 days after the date on which the taxpayer transferred the property relinquished, or the due date for the taxpayer's tax return for the taxable year in which the transfer of the relinquished property occurs (such as April 15th). Due to the Taxpayer's ability to extend the date of payment, the exchange period is usually 180 days.
CONSTRUCTIVE RECEIPT:
Control of the cash proceeds without actual physical possession by Exchanger or their agent.
BOOT:
Taxable situation, whether Cash or Mortgage (Debt Relief).
EXCHANGE AGREEMENT:
A deferred Exchange is defined as an exchange in which, PURSUANT TO AN AGREEMENT, the Exchanger transfers the relinquished property and subsequently receives the replacement property. THEREFORE, AN EXCHANGE AGREEMENT IS VITAL.
SAFE HARBOR:
Term used to identify the requirements to protect the Exchanger's money as well as the "Qualified Intermediary".
DEFERRED EXCHANGE:
This term is now used in place of "Non-Simultaneous Exchange" or "Starker Exchange". This is the type of an exchange where the Exchanger utilizes the exchange period described above.
QUALIFIED INTERMEDIARY:
Intermediary is the company who acts as the accommodator in the exchange. A qualified intermediary is identified as follows:
1. Not a related party to the Exchanger, (e.g. agent, attorney, broker, etc.);
2. Receives a fee;
3. Acquires the relinquished property from the Exchanger; and
4. Acquires the replacement property and transfers it to the Exchanger.
TAX REFORM ACT OF 1984:
In the Tax Reform Act of 1984, Congress addressed the IRS's continued displeasure with the Starker decision by amending Section 1031 to allow Delayed Exchanges; but only if all of the exchange property is identified and acquired within specific deadlines (see Exchange Period). And most important in the Conference Report accompanying the 1984 Act, Congress specifically reaffirmed that a "sale" followed by reinvestment in like-kind property does NOT qualify for tax deferral under Section 1031. So to qualify for tax deferral, it is still quite essential to carefully structure an exchange to avoid actual or constructive "receipt" of proceeds of sale and to prevent characterization of the transaction as a taxable sale and reinvestment.
1991 REVISIONS:
Basically the IRS held a hearing to try and "clean up" the Tax Reform Act of 1984 and to provide uniform terminologies, which are included herein. One of the main results for this revision is that IRS finally had a change of attitude toward Delayed Exchanges by accepting them instead of fighting them.
Please contact Melanie at (480) 296-9320 or mrettlerd@cs.com for a referral to some 1031 Tax Exchange Specialists in your area.
DISCLAIMER: PLEASE NOTE THIS IS NOT INTENDED TO BE TAX ADVICE IN ANY CONCEPTION OF THE TERM. YOU ARE ADVISED TO CONSULT WITH YOUR LEGAL AND/OR TAX ADVISOR BEFORE ATTEMPTING ANY SALE, PURCHASE OR EXCHANGE OF REAL PROPERTY. IT IS STRONGLY RECOMMENDED THAT YOU CONSULT WITH YOUR LEGAL COUNSEL, TAX ADVISOR AND YOUR COMPANY MANAGEMENT REGARDING ANY SPECIFIC SITUATIONS OR HOW THE INFORMATION CONTAINED IN THIS MATERIAL RELATES TO YOU, YOUR COMPANY'S POLICY AND/OR ALL TAX, LEGAL AND LOCAL PRACTICES.
ALL INFORMATION CONTAINED HEREIN IS FROM RELIABLE SOURCES AND IS DEEMED TO BE ACCURATE, BUT IS IN NO WAY GUARANTEED TO BE ACCURATE . ALL OF THE INFORMATION HEREIN, IS CURRENT AS OF 2-1-1996. BE SURE TO CONTACT YOUR LEGAL AND TAX ADVISORS FOR ANY CHANGES AND UPDATES.
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