Real estate investors who buy & sell from related parties often get blind sided by related party rules when using Section 1031.
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Section 1031 Related Party Rules
By John Hamrick on June 15, 2009 in Section 1031 Basics
When conducting Section 1031 transactions with a related party the simple rule is that you can sell to a related party, but you cannot purchase from one. The IRS rationale is that the taxpayer is essentially “cashing out” or basis shifting in related party transactions. Exchanges between related parties can be conducted under special circumstances; […]