The tax litigation and family law firm Mendes Weed, LLP successfully argued a case in front of California’s Office of Tax Appeals, one of the 1st 12 cases heard by the court. There is a complete write up about it on JDSupra titled “California’s Changing Approach to Like-Kind Exchanges” 

An excerpt: Internal Revenue Code (IRC) Section 1031 allows nonrecognition of gain or loss where property held for investment or for productive use in a trade or business is exchanged for like-kind property held for the same purpose. 

An issue arising under Section 1031 involves multiple owners of a real estate business entity holding one or more investment properties, where some owners want to maintain their investment while others want to cash out their investment. 

One common technique when the owners want to go their separate ways with investments is for the entity to redeem the interest of the member in exchange for an undivided interest in the property (a so-called “drop-and-swap”).  Thereafter, the entity and the former owner join in the sale of the property to a buyer.  Following the sale, the former owner can direct its share of the sale proceeds to a qualified intermediary to be reinvested in like-kind property without recognizing gain. 

The full transcript of our case before the Office of Tax Appeals (OTA) is available at https://ota.ca.gov/wp-content/uploads/sites/54/2018/06/Mitchell_Sharon_April-24-2018_Transcript.pdf 

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Read the full article on JD Supra

Christina Weed, Walnut Creek Attorney

California Tax Law Specialist

Partner Christina Weed has years of experience helping businesses and individuals with their complex California tax litigation issues. She is a licensed attorney with an LL.M. in Taxation from the University of San Diego and a Bachelor’s Degree in Accountancy. She serves as Chair of the Tax Section of the Contra Costa County Bar Association and is also a member of the Estate Planning Council Diablo Valley and the Tri-Valley Estate Planning Council. 

In 2018, Christina became one of the first lawyers to argue a case in front of California’s Office of Tax Appeals. 

Christina has been designated a Certified Specialist in Taxation by the State Bar of California.

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