1031 Exchange Data Since 1995
The Source reader Christopher Suhy had an interesting comment the other day about IRS 1031 “like kind” property exchanges. He asked if there had been any studies made showing and comparing regions and market segments where 1031 exchanges had taken place. As he points out, it would be useful to find market segments where 1031s are underutilized.
While I didn’t know of any such study, I knew that if there’s one thing the IRS does well, it’s produce paper. Lots and lots and lots of paper. Somewhere in that mountain of documents, I felt sure, was at least some statistical treatment of 1031 exchanges. All I had to do was find the right office and ask for it. What I obtain might not be exactly what Mr. Suhy was after, but if nothing else, it’d be a chance to watch the IRS do something from a different perspective than the one from which so many of us usually encounter it: beneath our desks, curled in the crash position.
So I found the Statistical Information Services (SIS) office within the IRS’s Statistics of Income Division. I’d love to tell a dramatic story where I had to hurdle obstacles and brave multiple layers of bureaucracy, but no such luck. I simply shot over an email asking about studies for 1031. I was amazed to get a response right away from a friendly economist there letting me know that, yes, they do have data on in-like-kind exchanges as under IRC 1031 (hey, neat!), alas, they do not have any studies organized geographically (darn).
And so here’s what we do have, shared here for the readership: an IRS spreadsheet of estimates of data based on samples of submitted IRS Form 8824 for tax years 1995-2010. In it you can see the broad strokes of popularity of 1031s, deal volumes, splits between individuals, partnerships and corporations, recapture, gains, etc. I’m no tax expert (and you should never, ever take anything you read here at The Source as tax or legal advice) but it does appear that form 8824 is a key filing for such exchanges. Any real estate tax professionals who care to chime in to confirm or deny, please leave a comment.
It’s not quite what you were looking for, Christopher, but at least it’s something on the topic at a national level straight from Washington, DC’s document mountain.