Section 1031 like-kind exchanges have been a component of the Internal Revenue Code almost from its inception. Taxpayers have been permitted under Section 1031 to exchange property held for use in a trade or business or for investment for like-kind property that will be similarly held without any need to recognize gain or loss on the exchange. In 2017, Congress limited the application of like-kind exchanges to real property.
Even with this limitation, like-kind exchanges are an important tool for every taxpayer. Baker McKenzie has been at the forefront in utilizing like-kind exchanges for its clients.
Private Structuring
Baker McKenzie lawyers rank among the thought leaders and "go to" counsel with respect to complex private like-kind exchange transactions. In addition to top tier experience and expertise on "bread and butter" Sec. 1031 issues and transactions, our lawyers have significant experience and deal volume in some of the most complex like-kind exchange transactions, including "drop & swap" and "swap & drop" exchanges, synthetic DSTs and non-safe harbor exchange (including Bartell-type transactions).
Whether in the context of a one-off transaction or as a smaller part of a larger M&A transaction, we provide market-leading guidance and service to taxpayers navigating the complexities and formalities of utilizing the Sec. 1031 rules to defer taxes and to continue to redeploy capital into the real estate markets.
Syndicated Transactions
Baker McKenzie is a nationally recognized leader in representing diversified real estate investment companies in connection with their real estate syndication transactions. With a deep bench multidisciplinary approach, Baker McKenzie is able to handle all aspects of syndication transactions -- from tax structuring and opinions, to real estate acquisition and financing, to securities advice and offering assistance, Baker McKenzie is positioned to provide sponsors and syndicators with an efficient, full service engagement backed by significant and cutting edge experience.
In particular, Baker McKenzie's lawyers can be counted among the nation's leading experts and practitioners with respect to like-kind exchange driven real estate syndication structures, including Delaware statutory trusts (DST) and tenancy-in-common (TIC) structures. Clients engaging Baker McKenzie for their tax-driven real estate syndications can expect the market-leading expertise and experience that comes with our deal volume and positioning as thought leaders alike.
Qualified Intermediaries
Baker McKenzie also represents qualified intermediaries large and small in connection with both their core transactional business and their broader platform wide initiatives. Our lawyers frequently assist on the qualified intermediary-side of complex like-kind exchange transactions, providing our qualified intermediary clients with advanced research and documentation support in connection with their role in all phases of a like-kind exchange.
In addition, we have also assisted qualified intermediaries with their own strategic endeavors, including acquisitions, pre-TCJA master exchange programs, development of new "form" documents and updating of existing "form" documents to adapt to changes in the law (such as the TCJA and Bartell).
Policy and Legislation
Finally, our industry leading experience and thought leadership keeps our lawyers at the forefront of various industry observers' and participants' efforts regarding like-kind exchange policy and legislation. Clients and trade associations alike frequently call upon Baker McKenzie lawyers to take the lead on issuing whitepapers, preparing comment letters and participating in industry and governmental forums in order to ensure their voices are heard and interests are represented in the policy and legislative process.